LETTER OF STATE TAX ADMINISTRATION OF UKRAINE

of June 8, 2011 No. 16083/7/16-1517-26

(Extraction)

GNAU considered the letters of PRAO and Ltd company concerning application of separate regulations of NKU regarding the taxation of the VAT sent to consideration of GNAU by the letter of the People's Deputy of Ukraine and reports.

According to subitem 196.1.3 of item 196.1 of Art. 196 of the Tax code of Ukraine (далееКодекс) brokers and insurance agents are not the taxation object of the VAT of transaction on provision of services on insurance, joint insurance or reinsurance by persons having the license for implementation of insurance activity according to the law, and also the services connected with such activities insurance (reinsurance).

That is the privilege determined by subitem 196.1.3 of item 196.1 of Art. 196 of the Code is applied only in case of provision of services on insurance, sosorakhovaniye or reinsurance.

At the same time according to Code regulations the taxation object of the VAT are transactions of taxpayers on delivery of goods and services which place of delivery is located on customs area of Ukraine, according to article 186 of the Code.

Besides, according to item 189.4 of Art. 189 of the Code taxation basis for goods/services which are transferred/turn out within commission agreements (consignment), the order, trust management is the delivery cost of these goods determined according to the procedure, stipulated in Clause the 188th of this Code.

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