Payment of royalties in cash is not subject to value added tax ( subparagraph 196.1.6 of paragraph 196.1 of Article 196 of the Tax Code of Ukraine (hereinafter – TCU).
However, § 26- 1 subsection 2 of section XX CLE determined temporarily from 1 January 2013 to 1 January 2023 are exempted from VAT transactions for the supply of software products and the operation of the software products, fees are not considered royalties in accordance with the second to seventh paragraphs of sub-clause 14.1.225 of clause 14.1 of Article 14 of Section I of the TCU .
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