Taxation of VAT on warranty repair services for goods

• According to the Tax Code of Ukraine, VAT is applicable to operations of supplying goods/services and importing goods into Ukraine.
• Supply of goods includes any transfer of ownership rights, including sales, exchanges, or gifts, as well as supply of goods by court decision.
• The procedure for warranty repair or replacement of complex household goods is approved by the Cabinet of Ministers of Ukraine.
• Warranty repair involves performing work to eliminate defects in the product to ensure its proper use during the warranty period.
• The elimination of defects is done by replacing or repairing components and performing regulatory work according to regulatory documents.
• When a taxpayer receives a product for warranty repair and subsequently returns it to the owner (consumer), there is no supply of goods.
• Therefore, there is no obligation to calculate VAT for such operations.
• However, the provision of services for warranty repair of goods is subject to VAT.
• The taxable base for such operations is determined based on the value of the services paid by the manufacturer of the goods that underwent warranty repair.

Source: od.tax.gov.ua

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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