Taxation of financial assistance provided by a Diia City resident
Does the taxable object of a Diia City resident - a taxpayer on special conditions include the amount of reimbursable/recoverable financial assistance provided to a resident/non-resident (including the cost of free property (works, services))?
In accordance with subpara. 141.91.2.6 of the TCU, the object of taxation of a resident of Diia City - a taxpayer on special conditions is transactions on payment (provision) to a person who is not a resident of Diia City - a taxpayer on special conditions, financial assistance in the amount determined in accordance with the rules established by subparagraphs 135.2.1.7, 135.2.1.8, 135.2.1.81 of the TCU.
At the same time, according to subpara. 135.2.1.7 of the TCU, the tax base is defined as the amount of:
► financial assistance: provided to a person who is not a resident of Diia City - a taxpayer on special conditions, if such financial assistance is not subject to return; provided to a related person (individual or legal entity) who is not a resident of Diia City - a taxpayer on special conditions, regardless of the presence of a return condition; provided to an unrelated person (individual or legal entity) that is not a resident of the Diia City - a taxpayer on special conditions, if the financial assistance was not returned within 12 calendar months starting from the month following the calendar month in which the amount of financial assistance was issued, or if before the expiration of the said 12-month period the debt on such financial assistance was recognized as uncollectible in accordance with clause14.1.11 of the TCU or was terminated due to debt forgiveness, except for
a) the amount of financial assistance provided to non-profit organizations, the taxation of transactions with which is regulated by subparagraphs 135.2.1.8 and 135.2.1.81 of the TCU;
b) the amount of financial assistance subject to refund provided in accordance with the provisions of a collective agreement or by decision of the taxpayer's governing body to an individual who is a specialist of a resident of Diia City - a taxpayer on special conditions and at the same time is not a person related to such a taxpayer, taking into account the provisions of sub-clause 137.10.4.5 of the TCU;
c) the amount of financial assistance that is subject to personal income tax in accordance with Section IV of the TCU or is not included in the taxable income. IV of the TCU or is not included in the calculation of the total monthly (annual) taxable income in accordance with Article 165 of the TCU and/or is not taxed in accordance with clause 170.7 of the TCU;
d) the amount of debt for goods (works, services) supplied by a resident of the Diia City - taxpayer on special conditions to an individual, which was forgiven by such resident of the Diia City - taxpayer on special conditions, which is subject to personal income tax in accordance with Section IV of the TCU or is not included in the total monthly taxable income in accordance with Section 170.7 of the TCU. IV of the TCU or is not included in the calculation of the total monthly (annual) taxable income in accordance with Article 165 of the TCU and/or is not taxable in accordance with clause 170.7 of the TCU;
e) amounts defined as non-refundable financial assistance in accordance with paragraphs four through six of subpara. 14.1.257 of the TCU;
e) membership (entrance) and/or targeted contributions to foreign (international) organizations and institutions in the amount not exceeding 300 amounts of the subsistence minimum for an able-bodied person established by law as of January 1 of the tax (reporting) year per organization;
► granted non-refundable financial assistance and/or the value of property (works, services) provided by the taxpayer free of charge during the tax (reporting) year to non-profit organizations defined in clause 133.4 of the TCU in an amount exceeding 0.5 percent. The amount of net income from the sale of products (goods, works, services) reflected in the taxpayer's financial statements for the previous reporting (tax) year, except for a non-profit organization to which the provisions of sub-clause 135.2.1.81 of the TCU (sub-clause 135.2.1.8 of the TCU) apply;
► granted non-refundable financial assistance and/or the value of property (works, services) provided by the taxpayer free of charge during the tax (reporting) year to a non-profit organization defined in clause 133.4 of the Tax Code and is a national higher education institution in accordance with the Law of Ukraine No. 1556-VII "On Higher Education" dated July 1, 2014, in an amount exceeding 1% of the net income from the sale of products (goods, works, services) reflected in the taxpayer's financial statements for the previous reporting (tax) year (subpara. 135.2.1.81 of the Tax Code).
In addition, according to subpara. 141.91.2.5 of the TCU, the object of taxation of a resident of the Diia City - a taxpayer on special conditions is the transfer of property (provision of works, services) (transfer of risks associated with ownership or transfer of results of works, services) to a person who is not a resident of the Diia City - a taxpayer on special conditions, without making claims for compensation of its (their) value, including the free transfer of property (works, services) in the amount determined in accordance with the rules established by sub-clause 135.2.1.6 of the TCU.
At the same time, according to subpara. 135.2.1.6 of the TCU, the tax base is defined as the sum of:
► the cost of property (works, services) provided to a person who is not a resident of Diia City - a taxpayer on special conditions, without making claims for compensation of its (their) cost (including free goods (works, services), except for:
a) provided to non-profit organizations, the taxation of transactions with which is regulated by subparagraphs 135.2.1.8 and 135.2.1.81 of the TCU;
b) distributed by a resident of Diia City - a taxpayer on special conditions (including with the involvement of third parties) during advertising (marketing) events, provided that the regular price of a unit of goods (works, services) used in an advertising (marketing) event as a separate unit of distribution does not exceed the amount of two subsistence minimums for an able-bodied person established by law as of January 1 of the tax (reporting) year;
c) if the value of such property (works, services) is subject to personal income tax in accordance with Section IV of the TCU or is not included in the calculation of the total monthly (annual) taxable income in accordance with Article 165 of the TCU and/or is not taxed in accordance with paragraph 170.7 of the TCU;
d) additional benefits provided by a resident of Diia City - a taxpayer on special conditions in favor of specialists of a resident of Diia City, if such additional benefits are not subject to personal income tax due to the lack of personalized accounting;
d) the amount of pension contributions within the framework of private pension provision and insurance payments provided for in sub-clauses "c" and "d" of clause 164.2.16 of the TCU.
For the purposes of subpara. 135.2.1.6 of the TCU:
► property provided free of charge is also considered to be property, the shortage of which was detected during the inventory, provided that the carrying value of such missing property as of the date of the inventory exceeds 5% of the total carrying value of the relevant homogeneous group of property for which the inventory is carried out (except for the write-off of the shortage within the natural loss rates), and the taxpayer has not applied to the relevant authorities with a statement on the commission of a criminal offense or bringing the perpetrators to justice or has not taken measures to recover the property
► homogeneous group of property means a set of property united on the basis of homogeneity of raw materials, purpose, production method, etc. If the taxpayer has determined a homogeneous group of property in accordance with the company's accounting policy, the relevant provisions of the company's accounting policy shall be used.