The head office of the DPS in Kyiv draws attention to the fact that factoring operations are not subject to VAT if the object of the debt is currency values, securities, including compensation papers (certificates), investment certificates, mortgage certificates with fixed income, operations on assignment of the right of claim on mortgage-backed credits (loans), housing checks, land bonds and derivatives.
Other factoring transactions are subject to VAT.
According to Art. 1077 of the Civil Code of Ukraine under a factoring contract, one party (the factor) transfers or undertakes to transfer funds to the disposal of the other party (the client) for a fee (in any manner stipulated by the contract), and the client cedes or undertakes to cede his right to the factor monetary claim to a third party (debtor).
The factor can be a bank or other financial institution, which in accordance with the law has the right to carry out factoring operations (Article 1079 of the CCU).
According to paragraphs 196.1.5 clause 196.1 of Art. 196 of the Tax Code of Ukraine, transactions with:
provision of services related to the transfer of funds provided by participants of payment systems and payment organizations of payment systems, provision of collection services, settlement and cash service, attraction, placement and return of funds under loan, deposit, contribution (including pension) contracts , management of funds and securities (corporate rights and derivatives), entrustment, provision, management and assignment of claims for financial loans of financial institutions, credit guarantees and bank sureties by the person who provided such loans, guarantees or sureties;
assignment of the right of claim, transfer of debt, trade in debt obligations (claims) for cash or securities, with the exception of debt collection operations and factoring (factoring) operations, except for factoring operations, if the object of the debt is currency values, valuable papers, including compensatory papers (certificates), investment certificates, mortgage certificates with a fixed income, operations on assignment of the right of claim on mortgage-backed credits (loans), housing checks, land bonds and derivatives;
transfer of ownership of the object of financial leasing to the lessor (new creditor) from the lessor (primary creditor) with preservation of the rights and obligations of the parties under the financial leasing contract in the event that the lessor (primary creditor) during the transfer of such object to the lessee of financial leasing, tax liabilities from the tax are accrued and reflected in the tax reporting for the relevant reporting (tax) period.
Source: gov.ua
