LETTER OF STATE TAX ADMINISTRATION OF UKRAINE

of March 27, 2000 No. 108/4/16-1210

About procedure for the taxation of the VAT of transactions on performance of works on gasification of the building

GNA of Ukraine considered the letter of the citizen concerning procedure for the taxation of the VAT of transactions on performance of works on gasification of the house and reports it.

In the territory of Ukraine the VAT was implemented since 1992. Sales of goods (works, services) was performed at the prices and rates which included also tax amount. And therefore also the cost of the services consumed by the population was paid for the corresponding rates including VAT which was not allocated separately from rate.

The law of Ukraine of 03.04.97 N 168/97-BP "About the value added tax" which is entered since 01.10.97 unlike earlier existing Decree of KMU, establishes other technique of charge of the VAT to the price and rates of goods (works, services). In particular, the VAT amount determined by application of rate of tax of 20% to taxation basis increases and allocated separately to the price and rates of goods (works, services).

Such procedure is applied to all transactions on sales of goods (works, services) including for works on gasification, services of telephone communication, transactions in electric power consumption, gas and other requirements both for the population, and for requirements of all industries of the national economy. Exceptions for separate segments of the population or separate industry of production are not provided by the Law called above.

And therefore one and all consumers of goods (works, services), including works on gasification, services of telephone communication, the electric power, gas, carry out settlings with suppliers (sellers) of such goods (works, services) at the prices increased by the corresponding VAT amount who, in turn, carry out calculations with the budget for the specified tax. I.e., in essence, the VAT is tax on the consumer who, consuming goods (works, services), pays their cost including VAT, and the seller accumulates such tax and, being payer of this tax, transfers it into the budget.

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