Starlink for Business

Specific Aspects of Purchasing Starlink

Both legal entities and individual entrepreneur (FOPs) may use Starlink for business purposes. If the equipment is purchased through a direct order via the Starlink system or through Ukrainian distributors, payment is made in a foreign currency. Please note that the company name and details must be indicated in all documents. Therefore, if the website processes sales only to individuals or does not allow the required company details to be entered, it is advisable to place the order through a manager or even change the supplier. Otherwise, difficulties may arise when registering the equipment at a later stage. If documents are received in a foreign language, they must be translated into Ukrainian and certified for accounting purposes. Attention should also be paid to the documentation relating to importation. If the company imports the equipment itself, a customs declaration supported by customs payment documents must be duly completed. It is also possible to purchase the equipment from a Ukrainian supplier and order network access through Starlink or an authorised reseller. However, regardless of the option chosen, it is essential to retain the agreement, invoice, payment and delivery documents for five years, as with any other primary supporting documentation.

Device in Accounting Records

For accounting purposes, the acquisition of a Starlink terminal by an LLC or another legal entity is treated as the purchase of equipment. The device should be recognised on the balance sheet either as a fixed asset (FA, sub-account 104) or as a low-value non-current tangible asset (LVNTA, sub-account 112). The agreement or ordering documents should specify the model, configuration, purchase price, transfer terms, and the terminal’s status within the Starlink system. A VAT invoice granting entitlement to a VAT input tax credit is mandatory, as are delivery documents if delivery was paid for separately. If the seller also provides setup, activation, or a prepaid connectivity period, separate supporting documents should be issued for those components in order to avoid overstating the cost of the fixed asset. Depreciation is charged monthly, reducing the financial result before taxation. Subscription fees are recognised as business expenses (administrative or selling expenses) on the basis of Starlink invoices and bank statements. Individual entrepreneurs (FOPs) applying the simplified taxation system do not maintain accounting records or expense accounting; therefore, they only need to retain the supporting documents for possible inspections.

Please note! A single order may include equipment, accessories, delivery charges, and payments related to services. For accounting purposes, these components must be separated. The cost of the purchased kit and the expenses incurred to bring it into working condition form part of the asset's cost and are subject to depreciation. In contrast, payment for internet access constitutes a service received and should be recognised as an expense in the period in which the service is received.

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Activation

Before making any payment, particular attention should be paid to whether the kit is unactivated or has already been linked to an account. This is because a terminal that is "new" in terms of condition is not necessarily available for activation by a new user. An unactivated terminal will undergo the verification process for the first time. By contrast, a terminal that is ready for activation has already been released by the previous user, who has obtained a special Transfer ID enabling the new user to register the terminal to their own account.

Starlink Verification

In Ukraine, the registration and verification of Starlink terminals are carried out through a dedicated State Register of Authorised Devices (commonly referred to as the “whitelist”), which is administered by the Ministry of Defence of Ukraine in cooperation with SpaceX. Legal entities may complete the verification process via the Diia portal using a qualified electronic signature (QES) or electronic digital signature (EDS). To do so, they must submit a “Notification on the Use of Starlink Terminals”, specifying terminal details and identifiers, including the KIT number and UTID. Where available, the Dish ID and account number should also be provided. For most legal entities, a limit of up to 10 terminals is established. This restriction does not apply to enterprises designated as critical infrastructure entities or otherwise recognised as critically important enterprises.

Unlike legal entities, an individual entrepreneur (FOP) cannot verify Starlink equipment through the Diia portal. Instead, the individual entrepreneur must visit a Centre for Administrative Services (CNAP) in person. The relevant application must be submitted to the CNAP, specifying the terminal details, including the KIT number and UTID. Where available, the Dish ID and account number should also be provided. Unlike legal entities, which are not required to physically present the terminal, an individual entrepreneur must present the terminal (or all terminals, if more than one device is being registered). In addition, the individual entrepreneur must provide a passport and a taxpayer registration number certificate (tax ID). Individual entrepreneurs may also verify their terminals through designated branches of Ukrposhta and Nova Poshta. Following verification of the submitted information, the terminal is added to the whitelist and may operate without restrictions. Please note that the seller’s documentation, inventory records, and verification application must all relate to the same device and contain consistent identification details.

Starlink terminals may be removed from the State Register of Authorised Devices in the event of destruction during enemy attacks, loss, sale, or other circumstances, by contacting the authority or organisation through which the registration was originally completed.

Tax Implications

Payment of the Starlink subscription fee to a non-resident constitutes an import of telecommunications services. Accordingly, both legal entities and individual entrepreneurs (FOPs) are required to assess and pay 20% VAT on such services. Where a company or entrepreneur is VAT-registered, this VAT liability is offset through the input VAT credit mechanism by issuing and registering a self-assessed VAT invoice. For those that are non-VAT registered (both legal entities and individual entrepreneurs operating under the simplified taxation system), this VAT becomes an additional direct expense that must be calculated independently, paid to the state budget, and reported in the relevant tax return. This is by no means a typical transaction. The reason is that the automatic inclusion of VAT in the purchase price applies exclusively to private individuals under the so-called “Google Tax” rules (Article 208-1 of the Tax Code of Ukraine), whereas a different mechanism applies to businesses.

If a Starlink subscription is purchased officially by a legal entity or individual entrepreneur in a B2B format and the purchaser’s registration details are provided, SpaceX issues the invoice without VAT, transferring the VAT obligation to the Ukrainian recipient pursuant to Article 208 of the Tax Code of Ukraine.

As a result, those who are not registered for VAT must calculate the additional 20% VAT themselves, submit the required reports, and pay the corresponding amount to the budget. To avoid this requirement, many Ukrainian individual entrepreneurs choose an alternative approach by subscribing under a standard consumer (B2C) tariff in the name of a private individual and paying with a personal bank card. In such cases, the foreign supplier includes VAT in the final price and administers the tax in Ukraine independently.

However, this approach carries certain risks. From a legal perspective, if the terminal is installed in an office, shop, café, or any other location used for business purposes, the tax authorities may regard it as being used in commercial activities during an audit and may subsequently assess the same 20% VAT liability, potentially together with penalties.

Where necessary, business entities may obtain an extract from the State Register, listing all Starlink terminals registered to the respective business entity.

Starlink terminals may also be verified at Ukrposhta and Nova Poshta branches. To do so, the applicant must provide the KIT number and UTID, and present the terminal to an employee of the branch for inspection.

Accounting Treatment

Depending on its value, the purchased and verified terminal is accounted for, either as a fixed asset (sub-account 152) or as low-value non-current tangible assets under acquisition (sub-account 153), with subsequent commissioning and recognition under sub-account 104 or 112, respectively.

The total cost of the acquired Starlink terminal includes all expenses incurred to bring it into working condition, including:

• the cost of the kit itself (dish, router and cables);
• customs duties and charges (if purchased directly from abroad);
• delivery costs;
• installation or configuration services provided by third-party specialists (where such services were engaged).

If the initial cost of a Starlink terminal is less than or equal to the capitalisation threshold for low-value non-current tangible assets (LVNTAs) established in the entity’s accounting policy (for example, UAH 20,000, UAH 40,000, etc.), it is accounted for as an LVNTA. In such a case, the depreciation method depends on the approach specified in the entity’s accounting policy. This may be the “100% method” (the most commonly used approach), under which 100% of the asset’s cost is recognised as an expense in the first month of its use (commissioning), or the “50%/50% method”, under which 50% of the cost is depreciated in the first month of use and the remaining 50% in the month when the asset is derecognised from the balance sheet.

As regards tax accounting, LVNTAs are not treated as fixed assets for the purposes of the Tax Code of Ukraine (subparagraph 14.1.138 of Article 14). Accordingly, no tax differences arise in respect of such assets for corporate income taxpayers.

If the initial cost of the terminal exceeds the LVNTA threshold established by the entity, the item is treated as a fixed asset and depreciated in accordance with the rules applicable to fixed assets. Such an asset falls within Group 4 of fixed assets, “Machinery and Equipment.” The minimum depreciation period established for this group is five years, although a longer period may be specified. The useful life must be determined by an order of the head of the entity (or by an individual entrepreneur under the general taxation system who has elected to depreciate fixed assets).

The straight-line method is generally used to calculate depreciation, whereby the cost of the asset is allocated evenly over the number of months comprising its useful life.

Depreciation is charged monthly, commencing in the month following the month in which the asset is commissioned.

As regards accounting for internet access services, the related costs may be recognised as administrative expenses where the service is used by the entity’s administrative staff, or as expenses of a production unit or sales department, depending on the actual user of the service.

The monthly fee for internet access is recognised as an expense in the period in which the relevant services are received.

It should be borne in mind that the terminal serves as a backup internet connection. The entity pays for the ability to use the service during the agreed period. Therefore, if the primary internet connection functioned without interruption throughout a particular month and there was no need to switch to Starlink, this fact alone does not deprive the subscription fee of its business purpose. Such costs should be recognised under the same expense categories that would apply if Starlink had actually been used.

To avoid potential issues during future tax audits, it is advisable to document the business rationale for maintaining a backup connection in an order issued by the head of the entity. Such order should establish the procedures for ensuring business continuity, uninterrupted access to accounting systems, electronic document management systems, and communication with customers.

Natalia Shcherbak, Accounting and Tax Consultant