Regarding the excise tax payment on fuel expropriated or withdrawn for needs of the Armed Forces of Ukraine

Norms of the Tax Code (subparagraph a) of Paragraph 216.3 Article 216 stipulate that taxpayers do not incur tax liabilities from excise tax in case of documentary evidence that relevant excisable product (products) are lost due to accident, fire, flood or other force majeure.

Current legislation of Ukraine, in case of imposition of martial law on the territory of Ukraine or in certain localities, stipulates that the military command with military administrations (in case of their formation) may alienate or confiscate property in state, private or communal ownership (Law of Ukraine “On the transfer, forced alienation or seizure of property under the legal regime of martial law or emergency state”).

Decree of the President of Ukraine as of 24.02.2022 № 64/2022 “On the imposition of martial law in Ukraine” established martial law in Ukraine.

Chamber of Commerce and Industry of Ukraine was informed about the certification of force majeure circumstances (https://ucci.org.ua/press-center/ucci-news/protsedura-zasvidchennia-fors-mazhornikh-obstavin-z-28-02-2022).

Given above specified, during the martial law, fuel that was in state, private or communal ownership, alienated or confiscated as well as property of legal entities and individuals for the state’s needs under the legal regime of martial law for needs of the Armed Forces of Ukraine and Ukraine, is considered lost due to force majeure if the reimbursement of its value is not made and in this case such alienation is not a sale of fuel. There is no excise tax liability in this case.