Conditions for VAT liability when a natural person contributes property to the statutory capital of a legal entity

• If an individual conducts entrepreneurial activities and is a VAT payer, the transfer of movable/immovable property to the statutory capital of a legal entity in exchange for corporate rights is subject to VAT
• According to the tax code, the object of taxation includes transactions of taxpayers supplying goods located on the customs territory of Ukraine
• Supply of goods includes any transfer of the right to dispose of goods, including exchange
• The tax authority’s position is based on two provisions of the tax code regarding the determination of the object of VAT taxation
• If property is acquired by an individual and not by a VAT-paying individual entrepreneur, there is no VAT liability, but if the property is used in the business and transferred to the statutory capital, VAT liability arises

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.

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