Personal income taxation of equipment and software provided to gig-specialists for the performance of work (provision of services)

When working with gig-specialists, LEXAID’s clients face the issue of personal income taxation of equipment and software provided to gig-specialists for the performance of work (provision of services).

In case of a gig-contract there is often a necessity to provide the gig-specialist equipment, software, generate an electronic digital signature to ensure the functioning of the company’s electronic document management system, etc. All of this seems to be provided for the performance of work (provision of services) and is similar to relations with employees, but gig-specialists do not have legal status of employees, so it is necessary to determine whether these transactions are considered to be additional benefits and whether such transactions are included in the personal income tax base.

In LEXADE’s team opinion, these operations are not income of gig-specialists and are not included in the personal income tax base. Therefore, we developed a corresponding gig-contract, which stipulates certain conditions for the use of equipment and software and applied to the State Tax Service of Ukraine for tax ruling.

The tax authorities confirmed the position of LEXADE’s attorneys, so we can confidently say that transactions involving the provision of equipment and software to gig-specialists for the performance of work (provision of services) are not taxable as an additional benefit. However, it is worth noting that a lot of depends on the terms of certain gig–contract itself, so if your company is facing the same issue and you need help with a gig–contract and/or tax advice, we are happy to provide you such assistance.