Accounting services for representative offices of foreign companies
The accounting of representative offices of foreign companies has numerous peculiarities. This is due to the fact that such representations are not separate legal entities and operate solely in the interests of the parent company. Accordingly, they must maintain accounting and reporting not only according to national standards but also international ones. Our accounting support for international companies will assist you in this.
Accounting services for foreign representations include:
- Providing accounting and tax consultations;
- Consultations on tax payment optimization, choice of taxation system, compliance with tax legislation, and planning;
- Reflecting business operations in accounting and their documentary registration;
- Recommendations on avoiding double taxation when conducting foreign economic activity;
- Client-bank management, formation of bank statements;
- Setting up accounting automation according to national and international standards, cooperation with suppliers, contractors, buyers;
- Formation of tax invoices, their registration in UERPN (for VAT payers); Calculation and payment of employee salaries, their taxation, payment of taxes and fees;
- Formation and submission of financial, tax, and statistical reports;
- Creating reports according to international standards for the parent company;
- Financial report analysis, preparation of financial indicators, budget forecasting, financial analysis, and recommendations for further financial management.
Accounting for foreign companies in Ukraine has several features:
- Registration: mandatory registration applies to foreign companies along with representations that acquire property rights and buy real estate in Ukraine, open bank accounts, and operate through separate divisions;
- Accounting and taxation of representations of foreign companies in Ukraine depend on profit generation, business activity, and type of representation (permanent or non-permanent);
- Profit tax: if a foreign company is non-profit or a charitable organization, it should not register as a profit tax payer. This also applies to the representation of such an enterprise. Non-permanent representations are also not profit tax payers. These are only those that conduct auxiliary and preparatory activities. These can be units that demonstrate, advertise products/goods of a non-resident, hold conferences, seminars, exhibitions, etc. Only permanent representations, i.e., those that conduct business activities, are profit tax payers. Permanent representations also include units that have a warehouse, factory, workshop, office, construction site, etc.;
- VAT: Only representations with an income exceeding 1 million UAH over the previous 12 months are obliged to become VAT payers in Ukraine. As for representations that received a smaller income and non-profit representations, they can choose and become VAT payers on a voluntary basis;
- Other taxes and fees: representations that have hired employees must also become tax agents and pay the single social contribution and military fee from salaries. The obligation to pay other taxes arises depending on property ownership and business activity. This can be a tax on real estate, land tax, excise tax, etc.;
- Report on controlled transactions: it must be submitted by permanent representations of non-residents, the number of whose operations in the previous year amounted to more than 10 million UAH;
- Reporting: the obligation to submit financial statements and profit tax reports lies with the non-resident (foreign organization). However, a non-resident can delegate this obligation to the representation based on a power of attorney. The need to compile reports according to IFRS is determined by the foreign company independently.
Advantages of working with us:
- Accounting for representations of foreign organizations has many nuances. At the same time, the activities of non-residents are constantly monitored by tax authorities, and large fines are provided for violations. Our specialists with many years of experience will help you avoid the risks of violating the law;
- Our clients can receive reports from different periods, understand the financial condition of the company in real-time, make timely compliance with the tax legislation of Ukraine;
- Accounting outsourcing of a representation of a foreign company will help save additional funds on maintaining representation employees;
- Our specialists quickly and efficiently solve individual tasks.
The company also provides additional services:
- Registration of the representation in the Ministry of Economic Development, Trade, and Agriculture of Ukraine, the state tax inspection;
- Personnel accounting.