Are the amounts of funds and goods transferred (handed) by taxpayers to the Armed Forces of Ukraine and other military formations for the state defense needs included in the pre-tax financial result?

Norms of the Tax Code of Ukraine as of 02.12.2010 № 2755-VI with changes and amendments (hereinafter – TCU) stipulate that the corporate income taxation object is income from a source of origin from Ukraine and abroad determined by adjusting (increasing or decreasing) the pre-tax financial result (profit or loss), determined in financial reporting of enterprise according to the national regulations (standards) of accounting or international financial reporting standards for differences that arise according to provisions of the TCU.

Herewith, Sub-paragraph 134.1.1 Paragraph 134.1 Article 134 of the TCU stipulates that for taxpayers whose annual income (net of indirect taxes) determined by accounting rules for the last annual reporting period does not exceed 40 million UAH, the taxation object may be determined without adjusting the pre-tax financial result for all differences (except from the significant value of taxation object of the past tax (reporting) years and adjustments, defined in Sub-paragraph 140.4.8 Paragraph 140.4 and Sub-paragraph 140.5.16 Paragraph 140.5 Article 140  of the TCU) determined according to provisions of Section III of the TCU.

Paragraph 33 Sub-section 4 Section XX of the TCU stipulates that temporarily, for a period of the anti-terrorist operation, adjustments, established by Sub-paragraph 140.5.9 Paragraph 140.5 Article 140 TCU, are not carried out starting from January 1, 2015 on the amount of funds or the cost of special personal protective equipment (helmets, bulletproof vests manufactured according to military standards), technical surveillance, medicines and medical devices, personal hygiene products, food, items of material support, as well as other goods, performed works, services provided according to the list determined by the Cabinet of Ministers of Ukraine, which are voluntarily transferred (handed) to the Armed Forces of Ukraine, National Guard of Ukraine, Security Service of Ukraine, Foreign Intelligence Service of Ukraine, State Border Guard Service of Ukraine, Ministry of Internal Affairs of Ukraine, Department of State Protection of Ukraine, State Service for Special Communications and Information Protection of Ukraine, other military formations, their units, military units, subdivisions, institutions or organizations formed according to the laws of Ukraine, maintained at the state budget’s expense for needs of ensuring the anti-terrorist operation.

Law of Ukraine as of 03.03.2022 № 2118-IX "On amendments to the Tax Code of Ukraine and other legislative acts of Ukraine on taxation peculiarities and reporting during the martial law" entered into force on 07.03.2022, which established that temporarily, for a period before termination or abolition of the martial law in Ukraine, collection of taxes and levies is carried out taking into account peculiarities specified in Paragraph 69 Sub-section 10 Section XX "Transitional Provisions" of the TCU.

Sub-paragraph 69.6 Paragraph 69 Sub-section 10 Section XX "Transitional Provisions" of the TCU stipulates that adjustments, determined in Sub-paragraph 140.5.9 Paragraph 140.5 Article 140 of the TCU, are not carried out on the amount of funds or the cost of special personal protective equipment (helmets, bulletproof vests made according to military standards), technical surveillance, medicines and medical devices, personal hygiene products, food, items of material support, as well as other goods, performed works, services provided according to the list determined by the Cabinet of Ministers of Ukraine, which are voluntarily transferred (handed) to the Armed Forces of Ukraine, National Guard of Ukraine, Security Service of Ukraine, Foreign Intelligence Service of Ukraine, State Border Guard Service of Ukraine, Ministry of Internal Affairs of Ukraine, Department of State Protection of Ukraine, State Service for Special Communications and Information Protection of Ukraine, other military formations, their units, military units, subdivisions, institutions or organizations formed according to the laws of Ukraine, maintained at the state budget’s expense for the state defense needs in connection with military aggression of the Russian Federation against Ukraine, as well as in favor of the central executive body that ensures formation and implementation of the state policy in the civil defense sphere, civil defense forces and / or health care institutions of state, communal property, and / or structural units for health care of regional, Kyiv and Sevastopol city state administrations, the amounts of funds transferred to special accounts opened by the National Bank of Ukraine for collection of funds.

As follows, adjustment of the pre-tax financial result in the amount of above specified funds and goods transferred (handed) by taxpayers to the Armed Forces of Ukraine and other military formations for the state defense needs in connection with military aggression of the Russian Federation against Ukraine is not carried out, that is such amounts are included in the pre-tax financial result as a part of expenses without restrictions.

Newsletter on the inclusion of funds and goods transferred (handed) by taxpayers to the Armed Forces of Ukraine and other military formations for the state defense in connection with military aggression of the Russian Federation against Ukraine in the costs is posted on the official web portal of the State Tax Service of Ukraine (https://tax.gov.ua/media-tsentr/novini/576194.html).

More information is in the “Knowledge Base” of public information and reference resource