LETTER OF THE STATE TAX SERVICE OF UKRAINE

of March 22, 2012 No. 5258/6/15-1415

About consideration of the letter

The State Tax Service of Ukraine considered the letter concerning the taxation of the profit got from production and sale of biological fuel which production and sale is carried out by subjects of managing based on cooperation agreement and reports.

According to item 4 of Art. 176 of the Economic code of Ukraine subjects of managing have the right together to perform economic activity for achievement of the joint purpose, without education of the single subject of managing, on the conditions defined by cooperation agreement.

The procedure for the taxation of joint activities in the territory of Ukraine without creation of the legal entity is determined by Item of item 153.14 of Art. 153 of the Tax code of Ukraine of December 2, 2010 No. 2755-VI, with changes and amendments (further - NKU). Joint activities without creation of the legal entity are carried out based on cooperation agreement.

Account of results of joint activities is kept by the taxpayer authorized on it by other parties according to terms of the contract, separately from accounting of economic results of such taxpayer (subitem 153.14. 1, subitem 153.14.2 of item 153.14 of Art. 153 of NKU).

For the purposes of the taxation the economic relations between participants of joint activities are equated to the relations on the basis of separate civil agreements (subitem 153.14.5 of item 153.14 of Art. 153 of NKU).

According to the item of 15 subsection of 4 section XX "Transitional provisions" of NKU (which is valid from January 1, 2011) it is temporary, till January 1, 2020, the profit, in particular, producers of biological fuel received from biological fuel sale is exempted from the taxation.

The specified regulation is applied taking into account the item of 21 subsection of 4 section XX of NKU.

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