To the attention of payers who transfer fuel for needs of the Armed Forces of Ukraine and other military formations, as well as reflection of fuel loss operations

published 11 March 2022 at 15:39 Chapter: News

Norms of the Tax Code of Ukraine (Sub-clause 14.1.6 of Paragraph 14.1 Article 14) stipulates that managers of excise warehouse and accordingly payers of excise tax on sales of fuel are not business entities that store fuel for its use exclusively for their own consumption or industrial processing provided carrying out sales operations to other persons, as well as the fact that:

or industrial processing, provided that implementation of sales operations to other persons, as well as the fact that:

premises or territory on each of which the total capacity of loading and unloading tanks and storage of fuel does not exceed 200 cubic meters and business entity (except for the single tax payer of Group IV) – is the owner or user of such premises or territory receives during the calendar year fuel in volumes not exceeding 1000 cubic meters;

or

premises or territory, regardless of the total capacity of loading and unloading tanks and fuel storage, owned or used by business entity - single tax payer of the Group IV, which receives during the calendar year fuel in quantities not exceeding 10.000 cubic meters (excluding taking into account amount of fuel obtained through fuel dispensers at fuel retail outlets for which the relevant licenses have been obtained).

Such entities must only obtain license to store fuel according to Article 15 of the Law of Ukraine "On state regulation of production and turnover of ethyl alcohol, cognac and fruit, alcoholic beverages, tobacco products, liquids used in electronic cigarettes and fuel" and in case of such subjects of wholesale or retail sale of fuel without obtaining license for a right to conduct it will be considered unlicensed activities, for which liability in the form of a fine is prescribed;

Chamber of Commerce and Industry of Ukraine has been notified of the certification of force majeure (circumstances, which is posted on the official website https://ucci.org.ua/press-center/ucci-news/protsedura-zasvidchennia-fors-mazhornikh-obstavin-z-28-02-2022, as well as the Facebook page https://www.facebook.com/1780981079/posts/10216868915793444/?d=n.

Provisions of Paragraph 69.5 Sub-section 10 of Section XX "Transitional Provisions" of the Tax Code of Ukraine, as amended by the Law as of 03.03.2022 №2118-IX "On Amendments to the Tax Code of Ukraine and other legislative acts of Ukraine on taxation and reporting in the period martial law", which entered into force on 07.03.2022. (hereinafter Law № 2118 – IX) stipulates that operations on voluntary transfer or alienation of products, including excisable, in favor of the Armed Forces of Ukraine and territorial defense units without prior or subsequent reimbursement of their value are not considered as sales operations for taxation.

Given the above specified, in case of force majeure circumstances during the martial law in Ukraine, operations on the free transfer of fuel for the Armed Forces of Ukraine and other military formations to defend the state in connection with Russia’s military aggression Federation, are not operations for the sale of such fuel to business entities that received such fuel solely for their own consumption or industrial processing and accordingly in the implementation of such operations of business entities that are not the fuel sale payers will not occur responsibilities:

obtain license for the wholesale or retail sale of fuel;

register as excise tax payers and register excise warehouses;

take into account amount of fuel transferred free of charge for these needs, when calculating amounts that business entities are entitled to receive during a year for storage for use solely for their own consumption (1000 cubic meters and 10000 cubic meters for the single tax payers of Group IV).

Business entities – excise tax payers on the sale of fuel are required to draw up an excise invoice for operations on free transfer of fuel for needs of the Armed Forces of Ukraine and other military formations (including transfer of fuel according to the Law of Ukraine “On transfer, forced alienation or seizure of property under the legal regime of martial law or state of emergency”) for the state defense needs in connection with military aggression of the Russian Federation as a transfer operation (physical transfer) of fuel to a recipient who is not a business entity compilation in one Copy 6). In this case, an obligation to obtain additional license for of wholesale and / or retail sale to carry out such operations does not arise.

If the fuel is lost, damaged, destroyed, including as a result of accident, fire, flood, other force majeure, in accordance with Sub-paragraph 216.3 Article 216 of the Tax Code of Ukraine business entities that are excise tax payers for the sale of fuel are obliged to draw up excise invoice for such operations (transaction code for compilation in one Copy 2).

Paragraph 69.1 Sub-section 10 of Section XX "Transitional Provisions" of the Tax Code of Ukraine stipulates that subject to changes made by the Law №2118-IX, in the absence of taxpayer during the martial law is able to timely fulfill tax obligation, in particular electronic documents containing data on the actual residues of fuel and turnover volume of fuel or ethyl alcohol – such an obligation shall be fulfilled within three months after the cessation or abolition of the martial law in Ukraine.

According to the electronic documents submitted by taxpayers containing data on actual fuel residues and volume of fuel or ethyl alcohol according to Paragraph 69.1 Sub-section 10 Section XX "Transitional Provisions" of the Tax Code of Ukraine, the supervisory authority will automatically compare turnover and fuel residues, indicators of volume of circulation of ethyl alcohol during a period of the martial law.

As of the of business entities’ reflection of fuel loss due to the military aggression of the Russian Federation, such operations are subject to reflection on the basis of primary documents prepared according to the Law of Ukraine "On accounting and financial reporting in Ukraine" and Article 231 of the Code (on the volume of fuel, in particular, damaged, destroyed, including due to accidents, fires, floods, other force majeure excise tax payers also sell excise invoices for lost fuel, which are subject to further registration after the martial law).

Glory to Ukraine!