- Compensation for damages for damaged goods: consequences for VAT
- Funds received by VAT payers as compensation for damaged or destroyed property are considered as compensation and are included in the VAT taxable base
- VAT is levied on transactions of taxpayers for the supply of goods/services located on the customs territory of Ukraine
- The taxable base for supply transactions is determined based on the contractual value, excluding certain taxes and fees
- Contractual value includes any amounts of money, material and intangible assets transferred to taxpayers directly by the buyer or through a third party in connection with the compensation for the value of goods/services
- Excluded from the contractual value are penalty amounts, interest, and inflation received by the taxpayer due to non-performance or improper performance of contractual obligations
- Funds paid as a penalty for damaged goods are not included in the VAT taxable base, while funds received as compensation for damaged or destroyed property are considered as compensation and are included in the VAT taxable base.
Source: news.dtkt.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.
