Tax Implications of Transport-Expedition Services Involving Non-VAT Paying Carrier: What About VAT?

• Transport and forwarding services in Ukraine involve a resident carrier who is not a VAT payer
• The value of services provided by the carrier does not increase the VAT base for the forwarder
• Transport and forwarding activities are defined as entrepreneurial activities involving the organization and provision of transportation services for various types of cargo
• The forwarder is a business entity that carries out or organizes transportation services on behalf of a client
• The client is the consumer of the forwarder’s services who entrusts the forwarder to carry out specific services and pays for them
• The carrier is responsible for transporting cargo to its destination under a transportation contract
• Payment to the forwarder is considered the amount paid by the client for the proper execution of the transportation contract
• The VAT base for the forwarder includes the value of transportation services provided, but does not include services provided by non-VAT paying carriers
• The provision of services by a non-VAT paying carrier does not increase the VAT base for the forwarder
• The tax treatment of transport and forwarding activities is determined by a tax consultation approved by the tax authorities

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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