August 12, 2020 · 4 min read
Is it possible to submit a certificate of non-resident status confirmation with an electronic apostille
Recently, more and more of our clients have encountered situations where their non-resident partners, in order to confirm the possibility of applying double taxation treaties, provide relevant certificates confirming their non-resident status (in accordance with paragraph 103.4 of the Tax Code of Ukraine) with an electronic apostille. The State Fiscal Service of Ukraine's consultation support line informed such taxpayers that these documents do not provide grounds for them to apply the provisions of the relevant double taxation treaties (in accordance with Article 103 of the Tax Code of Ukraine).
Do SFS employees have grounds to assert this, and what should a taxpayer do in such a situation
Indeed, on the SFS website, there are explanations from employees of the controlling authority, in which, relying on the provisions of Article 103 of the Tax Code of Ukraine, they come to the following conclusion:
«the provisions of the Tax Code of Ukraine do not provide for the use of a certificate in electronic form for the purposes of Article 103 of the Tax Code of Ukraine, therefore such a certificate cannot be a basis for applying the provisions of an international double taxation treaty. The basis for applying an international double taxation treaty is a certificate on paper, which is duly legalized and translated in accordance with the legislation of Ukraine».
Similar conclusions are also contained in some individual tax consultations of the territorial bodies of the State Fiscal Service of Ukraine.
It should be noted immediately that neither Article 103, nor any other article of the Tax Code of Ukraine, nor any other regulatory document of Ukraine contains any reservations that such certificates (other documents) must be exclusively in paper form. Moreover, according to paragraph 103.5 of the Tax Code of Ukraine, such a certificate «is issued by the competent (authorized) body of the respective country, as defined by an international treaty of Ukraine, in the form approved in accordance with the legislation of the respective country». That is, Ukrainian legislation merely stipulates that the certificate must be issued in accordance with the rules of the respective country (and if the rules of the respective country provide for the issuance of the certificate and/or an apostille on it in electronic form, then such a document will fully comply with the requirements of paragraph 103.5 of the Tax Code of Ukraine). As for affixing an electronic apostille to a paper certificate, we have not been able to find any explanations from SFS employees on this matter. However, it is not difficult to guess that the SFS's position on this issue will most likely be the same.
Evidently, in this situation, the taxpayer must consider the SFS's point of view (regardless of whether they agree with it). Of course, in any case, they will always have the opportunity to defend their point of view in court (including using the arguments we presented above). However, if for various reasons the taxpayer does not wish to take the situation to litigation, we advise them to consider other methods of legalizing this certificate provided for by current legislation.
Under what conditions is a certificate an official document in Ukraine
As the tax authorities themselves state in their numerous explanations on this issue, such a «certificate has the probative force of official documents in Ukraine provided that:
- Legalization of the certificate, i.e., procedures applied by diplomatic or consular agents of the country in whose territory the document is to be presented, to certify the authenticity of the signature, the capacity in which the person who signed the document acted, and, where appropriate, the authenticity of the seal or stamp affixed to the document.
- Or certification with an apostille stamp, if they are drawn up in the territory of states participating in the Convention Abolishing the Requirement of Legalisation for Foreign Public Documents, 1961.
- Or the existence of international treaties on legal assistance, according to the provisions of which official documents of foreign partner states, in particular, residence certificates from competent tax authorities, are accepted without any further confirmation (without consular legalization and, accordingly, without an apostille)».
Thus, one of the possible ways to legalize a non-resident's paper certificate is its so-called «consular legalization», the procedure for which is detailed in the relevant Instruction on the procedure for consular legalization of official documents in Ukraine and abroad, approved by Order of the Ministry of Foreign Affairs of Ukraine No. 113 dated 04.06.2002.
For this and any other questions concerning legal, financial, tax, HR, and other aspects of conducting your business, you can always contact our specialists for prompt and qualified consulting and practical support.
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