LETTER OF THE STATE TAX SERVICE OF UKRAINE

of July 3, 2012 No. 9374/5/15-3416

The State Tax Service of Ukraine considered the letter of the Ministry of emergency situations of Ukraine of 28.05.2012 No. 035016/08 concerning charge of the value added tax in case of provision of services of fire protection on a contract basis by divisions of the state (professional) fire protection and reports.

According to Item 185.1 of article 185 of the Tax Code of Ukraine of 02.12.2010 No. 2755-VI (further - the Code) the taxation object are transactions of taxpayers on delivery of goods/services which place of delivery is located on customs area of Ukraine, according to article 186 of this Code.

At the same time the Code provides release from the taxation when implementing transactions by executive bodies and local government bodies, and also other persons, authorized such bodies or the legislation to provide to physical persons or legal entities the specified services which obligation of obtaining (provision) is established by the legislation, including payment for registration, licensing, certificates in the form of charges, the state fee and so forth (subitem 197.1.18 of Item 197.1 of article 197 of the Code) on delivery of the state paid services.

Application of regulation of subitem 197.1.18 of Item 197.1 of article 197 of the Code requires simultaneous accomplishment of such requirements:

• services shall be provided by executive bodies and local self-government, and also to provide by other persons, authorized such bodies or the legislation the specified services; services which are provided shall be paid; obligation of receipt of services by physical persons and legal entities shall be established by the legislation;

• means for the rendered services in full shall come to the budget.

Therefore, paid services of fire protection which are provided by divisions of the state (professional) fire protection on a contract basis and which obligation of obtaining by physical persons and legal entities is not stipulated by the legislation are subject to the taxation of the VAT in accordance with general practice.

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