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LETTER OF THE MINISTRY OF THE INCOME AND CHARGES OF UKRAINE

of May 27, 2013 No. 3645/6/99-99-19-16

The ministry of the income and charges of Ukraine considered offers concerning the taxation the value added tax of transactions of financial leasing and reports.

According to Item 185.1 of article 185 of the Tax Code of Ukraine (further - the Code) the taxation object the value added tax are transactions of taxpayers on delivery of goods which place of delivery is located on customs area of Ukraine, according to article 186 of this Code, including transaction on transfer of object of financial leasing to use to the leasing recipient/lessee. According to subitem 14.1.191 of Item 14.1 of article 14 of the Code transactions on the actual transfer of tangible assets to other person based on the agreement on financial leasing (return of tangible assets according to договоромо financial leasing) or other arrangement according to which payment is delayed are also considered as delivery of goods, but the ownership to tangible assets is transferred no later than date of implementation of the last payment.

According to Item 187.6 of article 187 of the Code date of emergence of the tax liabilities of the lessor (lessor) on transactions of finance lease (leasing) is date of the actual transfer of object of finance lease (leasing) to use to the lessee (leasing recipient). And regulations of Item 198.2 of article 198 of the Code date of emergence of the right of the lessee (leasing recipient) to increase in the tax credit for transactions of finance lease (leasing) determine date of the actual receipt of object of financial leasing by such lessee. At the same time according to subitem 196.1.2 of Item 196.1 of article 196 of the Code charge and interest payment or the commissions as a part of lease (leasing) payment within the agreement of financial leasing are not the taxation object the value added tax.

Legal aspects of replacement of the creditor are established by regulations of the Civil code of Ukraine (further - GKU), in particular Articles 512 - 519. So, according to article 512 GKU the creditor in the obligation can be replaced by other person as a result of transfer of the rights by it to other person according to the transaction (right to claim concession). At the same time according to article 514 GKU pass the rights of the initial creditor in the obligation in amount to the new creditor and on conditions which existed at the time of transition of these rights if other is not established by the agreement or the law.

Also according to subitem 196.1.5 of Item 196.1 of article 196 of the Code are not the taxation object the transaction value added tax on trade for money or securities in debt obligations.

Based on the stated regulations of the Code, GKU and for the purpose of non-admission of double taxation if the initial lessor (the initial creditor) by transfer of object of financial leasing added and reflected in tax accounting and the reporting the tax liabilities on the value added tax, in case of right to claim concession under the agreement of financial leasing repeatedly tax liabilities on the value added tax as behind object of financial leasing at the initial lessor (the initial creditor), and on leasing payments at the new lessor (the new creditor) will not arise.

If return of object of financial leasing is performed further, then the leasing recipient (debtor) - the taxpayer on value added shall add the tax liabilities on the value added tax at the rate of 20 percent on the cost of such object and issue properly drawn up tax delivery note to the new lessor (the new creditor), and the new lessor in case of receipt back of such object of leasing and tax delivery note will have the right to the tax credit.

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