- Free transfer of a company’s own products is generally treated as a supply and subject to VAT.
- For charitable donations, VAT exemption can apply under Article 197.1.15 of the Ukrainian Tax Code if three conditions are met.
- The recipient must be a registered charitable organization, the transfer must be completely free of any compensation or return obligation, and the donated items must fit the permitted charitable-purpose requirements.
- Normally, a free supply would require VAT based on fair market value and may involve issuing two tax invoices, but this VAT treatment is avoided if the exemption applies.
- The article discusses how to document the donation, issue tax invoices, and whether additional VAT liabilities under p. 198.5 may arise.
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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