VAT Taxation of Inventory Write-Off Operations

• VAT credit is generally based on the contractual value of purchased/produced goods, services, and assets, including imports.
• If such items are used in non-business activities, the taxpayer must accrue VAT liabilities under Article 198.5 of the Ukrainian Tax Code.
• For goods/assets intended for exempt use, liabilities arise on the purchase date; if they start being used in exempt/non-business operations later, liabilities arise when that actual use begins.
• Writing off inventory items, including spoiled goods, is treated as use in non-business activity.
• Therefore, if input VAT was claimed on such inventory, the taxpayer must charge VAT liabilities at the main rate by the last day of the reporting period when the write-off occurs.

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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