INK GNS No. 3772 / IPK / 99-00-05-06-02-06 dated 09/10/2020

The State Tax Service of Ukraine has considered an appeal to determine tax liabilities for VAT when writing off fixed assets and, … reports.

As indicated in the appeal, the company is liquidating fixed assets due to their physical and moral deterioration. Based on the conclusions of the relevant commission of the company, an act was drawn up to write off such fixed assets.

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In the event of liquidation of the main production or non-production assets in connection with their destruction or destruction due to force majeure circumstances and in other cases of liquidation without the consent of the taxpayer, including theft, VAT tax liabilities are not charged if the fact of destruction or destruction is documented in compliance with the law. Such documents can be:

– certificate of the Ukrainian Chamber of Commerce and Industry, confirming the fact of occurrence of force majeure circumstances, obtained in accordance with the Law of Ukraine ” On Chambers of Commerce and Industry in Ukraine “;

– an act certifying the fact of a fire, drawn up in accordance with the Cabinet of Ministers of Ukraine No. 2030 , which is signed by a commission, which includes at least three people, including a representative of the territorial body of the Emergencies Ministry of Ukraine, a representative of the administration (owner) of the facility, a victim;

– data (extraction) from the relevant register on the termination of ownership of fixed assets in the event of their complete destruction in accordance with the procedure determined by Art. 349 of the Civil Code of Ukraine ;

an extract from the Unified Register of Pre-trial Investigations, certifying the fact of registration of information about a criminal offense, obtained in the manner prescribed by the Criminal Procedure Code of Ukraine , in case of theft of fixed assets;

other documents, in accordance with the legislation, confirm the fact of destruction, destruction, theft of basic production or non-production means.

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In the event of liquidation of fixed assets due to their destruction, disassembly or transformation in another way, as a result of which they cannot be used for their original purpose, the taxpayer does not charge tax liabilities for value added tax (including in accordance with the provisions of clause 198.5. Of the Code) in the case, in particular, the submission to the supervisory authority of a properly executed act for the write-off of fixed assets in the form established by Order No. 352or in any form, provided that such a document contains all the necessary information that allows the identification of the operation, and there are proper details of the original document. Regardless of the form of drawing up a document for writing off fixed assets, such a document must confirm the fact of destruction, disassembly or transformation of fixed assets in another way, as a result of which the fixed asset cannot be used for its original purpose.

If this condition is not met when writing off such fixed assets, the payer is obliged to determine tax liabilities for VAT at the basic rate in accordance with subparagraph “d” of paragraph 198.5. Of the Code based on the tax base determined in accordance with clause 189.1. Of the Code, and draw up, no later than the last day of the reporting (tax) period and register with the ERNN within the timeframe established by the TCU for such registration, a consolidated tax invoice, since such fixed assets are not used in taxable transactions / economic activities of such a taxpayer.

Generalizing tax advice on documentary evidence of the destruction or destruction of basic production or non-production assets approved by Order No. 673 .