Transfer of Raw Materials and Fuel to Contractor: VAT Implications and Ownership Rights

• Raw materials, supplies, and fuel remain the property of the customer when transferred to the contractor for work.
• Ownership does not transfer to the contractor, so VAT obligations are not incurred by the customer.
• According to the Tax Code of Ukraine, VAT is applicable to the supply of goods and services within Ukraine.
• Service supply includes any operation that is not the supply of goods, including intellectual property rights and other intangible assets.
• Goods supply involves the transfer of ownership rights, including sale, exchange, or gifting.
• Contractual relationships are governed by the Civil Code of Ukraine.
• Under a contract, the contractor must perform work at their own risk and the customer must accept and pay for it.
• If work is done using the customer’s materials, the contractor is responsible for their proper use and must report and return any remaining materials.
• The contract should specify material usage norms, return timelines, and contractor liability for non-performance.

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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