The main administration of the DPS in Kyiv informs that the revenues of the general fund of the budgets of rural, settlement, and urban territorial communities include rents for the use of property complexes and other communally owned property, the founders of which are village, settlement, and city councils .
Such a norm is defined in clause 29 of Art. 64 of the Budget Code of Ukraine dated July 8, 2010 No. 2456-VI with amendments and additions.
In accordance with clause 5 of Art. 17 of the Law of Ukraine dated October 3, 2019 No. 157-IX “On the Leasing of State and Communal Property”, the procedure for distributing rent for communally owned objects between the relevant budget, the lessor and the balance-keeper is determined by the representative body of local self-government.
According to paragraphs “b” clause 185.1 of Art. 185 of the Tax Code of Ukraine dated December 2, 2010 No. 2755-VI, as amended, the object of taxation is the operations of taxpayers for the supply of services, the place of supply of which is located in the customs territory of Ukraine, in accordance with Art
. 186 PKU.
The operation of payment of rent or concession payment under contracts for the lease or concession of an integral property complex of a state or communal enterprise (its structural subdivision) is not subject to taxation, if the lessors or concessionaires under the contracts are state authorities or local self-government bodies, and payments in accordance with the law, are included in the State Budget of Ukraine or the local budget (item 196.1.15, item 196.1, Article 196 of the Code of Civil Procedure).
That is, the operation of paying rent for leased communal property is not subject to taxation if the following conditions are met:
a complete property complex of a utility company (its structural unit) is leased;
the local self-government body acts as the lessor under the contract;
rental payments are fully credited to the local budget.
In the event of non-compliance with any of the specified conditions, the operation of payment of rent for leased communal property is subject to VAT in the generally established manner at the basic rate.
In accordance with clause 201.1 of Art. 201 of the Tax Code of Ukraine on the date of occurrence of tax liabilities, the taxpayer is obliged to draw up a tax invoice in electronic form, subject to the condition of registration in accordance with the procedure established by law, of a qualified electronic signature of a person authorized by the payer, and to register it in the Unified Register of Tax Invoices within the period established by the Tax Code.
Therefore, the services provided by the lessor for the lease of communal property are subject to VAT taxation, regardless of whether the lessee distributes the amount of the rent or transfers it to the lessor’s account in full (except for operations specified in clause 196.1.15 of clause 196.1 Article 196 of the Criminal Procedure Code).
Therefore, on the date of VAT tax liability, the utility company – the lessor (regardless of whether the lessee distributes the amount of rent or transfers it to the account of the lessor in full) issues a tax invoice for the entire amount of rent provided for in the lease agreement.
Source: gov.ua
