LETTER OF STATE TAX ADMINISTRATION OF UKRAINE

of April 29, 2009 No. 3999/6/15-0216

(Endurance)

According to subitem 4.5.1 of Art. 4 of the Law of Ukraine "About the value added tax" (further - the Law on the VAT) if after delivery of goods (services) any change of compensation amount of their cost, including the price review following delivery, recalculation in cases of return of goods to person which presented them is performed, the amounts of the tax liabilities and the tax credit of the supplier and the receiver are subject to the corresponding adjustment. If such recalculation is resulted by reduction of compensation amount for benefit of the payer of nalogapostavshchik, then:

a) the supplier respectively reduces the amount of the tax liabilities by results of tax period during which such recalculation was carried out, and sends to the receiver calculation of the modified value of tax;

b) the receiver respectively reduces the amount of the tax credit by results of such tax period if it is registered as the taxpayer on date of adjustment, and also increased the tax credit in connection with receipt of such goods (services).

If at the time of receipt of advance payment based on the signed agreements (invoices) of closed joint stock company has no documentary evidences from buyers of permits (intermediaries, other companies or the organizations) concerning availability of the right to privileges according to subitem 5.1.9 of Art. 5 of the Law on the VAT and charges the tax liabilities on the VAT in accordance with general practice at the rate of 20%, and in case of arrival of physical persons aged up to 18 years receives such confirmation based on the certificate of birth of the child or the passport, then society shall carry out adjustment of the tax liabilities towards their reduction.

At the same time the modified amounts of the tax liabilities can be returned to buyers by cash or clearing settlements (depending on primary payment method of permits) or by transfer in the cost of the permit or otherwise by agreement of the parties or according to the procedure, determined by internal documents of society.

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