The head office of the DPS in Kyiv reports that in accordance with Art. 185 of the Tax Code of Ukraine, the object of VAT taxation is, in particular, the supply of goods and services, the place of supply of which is located in the customs territory of Ukraine and is determined in accordance with Art. 186 PKU.
The place of supply of transport and forwarding services in accordance with paragraphs “”f”” clause 186.3 of Art. 186 of the Civil Code is considered to be the place where the recipient of services is registered as a business entity or – in the absence of such a place – the place of permanent or primary residence.
According to the Law of Ukraine dated July 1, 2004 No. 1955-IV “”On Transport and Forwarding Activities””, the funds paid by the client to the freight forwarder for the proper execution of the transport forwarding contract are considered as payment to the freight forwarder. The forwarder’s fee does not include the forwarder’s expenses for the payment of services (works) of other persons involved in the execution of the transport forwarding contract, for the payment of fees (mandatory payments) paid during the execution of the transport forwarding contract.
Taking into account the above, the provision of transport and forwarding services by a non-resident to a resident customer is subject to taxation, regardless of whether the carrier is a resident or a non-resident.
The rules for taxation of services provided by non-residents in the customs territory of Ukraine by registered VAT payers are established by Art. 208 of the PKU.
Article 208 of the Code of Civil Procedure defines that when receiving services in the customs territory of Ukraine from a non-resident, their recipient must charge VAT at the basic rate on the tax base determined in accordance with Article 190.2. 190 PKU.
The amount of accrued VAT is included in the tax liability of the VAT tax return for the relevant reporting period.
The recipient of services is a VAT payer in accordance with the procedure specified in Art. 201 of the Code of Civil Procedure, makes a tax invoice indicating the amount of tax charged by him, which is the basis for assigning VAT amounts to the tax credit in the prescribed manner.
If the recipient of services is not registered as a VAT payer, then a tax invoice is not issued. The form for calculating the tax liabilities of such a recipient of services is approved as an appendix to the VAT tax return.
Source: kyiv.tax.gov.ua
