LETTER OF STATE TAX ADMINISTRATION OF UKRAINE

of June 16, 2000 No. 3045/6/16-1313

About procedure for use of the provisions of the law of Ukraine "About the value added tax" when carrying out goods exchange transactions by payers in the field of foreign economic activity

GNA of Ukraine in connection with requests concerning procedure for use of the provisions of the law of Ukraine when carrying out goods exchange transactions by payers in the field of foreign economic activity reports it "About the value added tax".

According to item 6.2 of Art. 6 of the Law of Ukraine of 03.04.97 N 168/97-BP "About the value added tax" transactions on sales of goods which were exported (are exported) by payers out of limits of customs borders of Ukraine, and sale of works (services), held for use and consumption outside customs area of Ukraine, are assessed with the tax VAT on zero rate.

Item 11.6 of Art. 11 of the Law established temporary standard according to which till 01.01.2000 in case of export (export) of goods (works, services) for borders of customs area of Ukraine by barter (goods exchange) transactions the VAT amount paid (added) in connection with purchase of goods (works, services) on increase in the tax credit did not belong, and joined in gross costs of production of the taxpayer.

Thus, since 01.01.2000, export transactions are subject to the taxation of the VAT at the rate of 0 percent irrespective of form of carrying out settlings with the nonresident and the right to the tax credit on goods purchased (works, services), except preferential, arose in accordance with general practice.

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