Regarding the transfer of property rights to use equipment as a contribution to the authorized capital of another enterprise

28.07.2016

The main administration of the Federal Tax Service in the Dnipropetrovsk region considered the appeal dated 24.06.2016 No. 178-06/16 ___ regarding the transfer of property rights to use equipment as a contribution to the authorized capital of another enterprise and in accordance with the provisions of Article 52 "Tax consultation" of the Tax Code of Ukraine dated 02.12. 2010 No. 2755-VI (with amendments and additions, hereinafter - PKU) within the limits of competence and authority, reports the following.

According to Clause 44.1 of Article 44 of the PKU, for taxation purposes, taxpayers are required to keep records of income, expenses and other indicators related to the determination of objects of taxation and/or tax liabilities, based on primary documents, accounting registers, financial statements, other documents related to the calculation and payment of taxes and fees, the management of which is provided for by law.

Clause 44.2 of Article 44 of the PKU stipulates that the income tax payer uses accounting and financial reporting data for income, expenses and financial results before taxation to calculate the object of taxation.

The procedure for calculating the object of taxation from income tax is set out in Article 134 of the Civil Code, according to which income with a source of origin in Ukraine and outside its borders is taxed, which is determined by adjusting (increasing or decreasing) the financial result before taxation (profit or loss), determined in the financial statements of the enterprise in accordance with the national provisions (standards) of accounting or international standards of financial reporting, on the differences that arise in accordance with the provisions of Section III of the PKU (enterprises in which the annual income from any activity for the last annual reporting period does not exceed twenty million hryvnias have the right to decide not to apply adjustments to the financial result).

The term "business activity" is defined by subsection 14.1.36 of clause 14.1 of article 14 of the Code of Civil Procedure - it is the activity of a person related to the production (manufacturing) and/or sale of goods, performance of works, provision of services, aimed at obtaining income and carried out by such a person independently and/or through its separate divisions, as well as through any other person acting for the benefit of the first party, in particular under commission agreements, mandates and agency agreements.

According to sub-clause 14.1.81 of clause 14.1 of article 14 of the PKU, investments are economic operations that involve the acquisition of fixed assets, intangible assets, corporate rights and/or securities in exchange for funds or property.

Direct investments are business transactions that involve the contribution of funds or property in exchange for corporate rights issued by a legal entity when they are placed by such a person (subparagraph b of subparagraph 14.1.81 of paragraph 14.1 of article 14 of the PKU).

The term "business transaction" is defined by Article 1 of the Law of Ukraine dated 16.07.1999 No. 996-XIV "On Accounting and Financial Reporting in Ukraine", it is an action or event that causes changes in the structure of assets and liabilities, the company's equity.

Therefore, the investment transaction specified in the letter is a business transaction, which is one-time, non-systematic in nature and is limited to the transfer of the right to use the equipment, the receipt of corporate rights in exchange and the subsequent receipt of dividends, and does not concern the maintenance and accounting of the property itself on the owner's balance sheet.

That is, the economic relationship between the investor and the enterprise that received the right to use the equipment is an investment operation and an economic activity in the sense of the PKU.

Regarding the depreciation of fixed assets, the right to use them has been transferred to another enterprise as a contribution to the authorized capital

Clause 138.3 of Article 138 of the Civil Code establishes the procedure for calculating the depreciation of fixed assets or intangible assets for determining the object of taxation in tax accounting.

According to subsection 138.3.1 of clause 138.1 of article 138 of the PKU, the calculation of depreciation of fixed assets or intangible assets is carried out in accordance with national provisions (standards) of accounting or international financial reporting standards, taking into account the restrictions established by subsection 14.1.138 of paragraph 14.1 of article 14, chapter I of the PKU, sub-paragraphs 138.3.2 - 138.3.4 of this clause.

That is, Clause 138.3 of Article 138 of the Civil Code provides for separate tax accounting of fixed assets and intangible assets with corresponding depreciation calculation.

According to subsection 14.1.138 of clause 14.1 of article 14 of the PKU, fixed assets are tangible assets, including reserves of minerals provided for the use of subsoil areas (except for the value of land, unfinished capital investments, public highways, library and archival funds, tangible assets, value which does not exceed 6,000 hryvnias, non-production fixed assets and intangible assets), which are assigned by the taxpayer for use in the taxpayer's economic activity, the value of which exceeds 6,000 hryvnias and gradually decreases due to physical or moral wear and tear and the expected period of useful use (exploitation ) which from the date of commissioning is more than one year (or the operating cycle, if it is longer than one year).

Non-production fixed assets are fixed assets that are not used in the taxpayer's economic activity (subclause 138.3.2 of clause 138.3 of Article 138 of the PKU).

According to Article 317 of the Civil Code of Ukraine dated 16.01.2003 No. 435-IV, the owner has the right to possess, use and dispose of his property.

The right of use of another person, a non-owner, consists in the possibility of releasing useful properties from an object belonging to another person. It is derived from the right to release the useful properties of the owner, since the owner's right is the most complete right to property, which includes both the right to use and the right to possess and dispose.

Entering the right of use into the authorized capital of another enterprise is a transfer by the owner of his right to release useful properties from his thing in a certain period of time.

In fact, when transferring the right to use the property to another person, the owner loses his right to use, which with some degree of convention can also be called the alienation of the right to use.

Thus, the right to use the equipment as the use of its useful properties (in particular, the production of certain products) belongs to only one person (who has received this right), and the equipment cannot be used by the investor in his own economic activity in the sense of subsection 14.1.36 from the moment of the transfer of the right to use it clause 14.1 of article 14 of the PKU (for the production of own products, etc.).

That is, for the purpose of practical application of the norms of the PKU, the equipment, the right to use which has been transferred as a contribution to the statutory fund of another enterprise, is a non-productive capital asset.

Fixed assets, the right of use of which has been transferred to another legal entity as a contribution to the authorized capital, for the investor, from the moment of such transfer, are transferred to non-productive fixed assets.

According to the above norms, the cost of non-production fixed assets is not subject to depreciation in tax accounting.

Regarding the accounting of the specified equipment on the owner's balance sheet, it should be noted that the definition of the term "non-production fixed assets" is not provided for by the national accounting regulations.

The methodological principles of forming in accounting information about fixed assets, other non-current tangible assets and unfinished capital investments in non-current tangible assets, as well as the disclosure of information about them in financial reporting are set out in Accounting Regulation (standard) No. 7 "Fixed Assets", approved by order No. 92 of the Ministry of Finance of Ukraine dated 27.04.2000 and registered with the Ministry of Justice of Ukraine on 18.05.2000 No. 288/4509 (hereinafter - P(S)BO No. 7).

Depreciation is charged during the period of useful use (operation) of the object, which is established by the enterprise/institution (in the administrative act) when recognizing this object as an asset (when it is entered on the balance sheet), and is suspended for the period of its reconstruction, modernization, completion, retrofitting and preservation (clause 23 of P(S)BO No. 7).

Therefore, in the company's accounting, depreciation is calculated in accordance with the norms of P(S)BO No. 7.

Taking into account the above, in accordance with Clause 138.3 of Article 138 of the Civil Code, taking into account Sub-Clause 14.1.138 of Clause 14.1 of Article 14 of the Civil Code, the cost of equipment, the right to use which has been transferred to the authorized capital of another enterprise, is not subject to depreciation in tax accounting.

At the same time, the financial result before taxation will increase by the amount of accrued depreciation of the specified equipment according to accounting data, which will be reflected in line 1.1.1 of Appendix RI to the income tax declaration.

Regarding taxation with value-added tax of operations on the transfer of property rights to equipment to another business entity as a contribution to the authorized capital of the latter

According to subsection 14.1.191 of clause 14.1 of article 14 of the Code of Civil Procedure, economic activity is the activity of a person related to the production (manufacturing) and/or sale of goods, performance of works, provision of services, aimed at obtaining income and carried out by such a person independently and/or through its separate divisions, as well as through another person acting for the benefit of the first person, in particular under commission agreements, mandates and agency agreements.

According to sub-clause 14.1.81 of clause 14.1 of article 14 of the PKU, investments are economic transactions that involve the acquisition of fixed assets, intangible assets, corporate rights and/or securities in exchange for funds or property.

In accordance with subsection 14.1.185 of clause 14.1 of article 14 of the Code of Civil Procedure, supply of services is any operation that is not the supply of goods, or any other operation for the transfer of rights to objects of intellectual property rights and other intangible assets or the granting of other property rights in relation to such objects objects of intellectual property rights, as well as the provision of services that are consumed in the process of performing a certain activity.

According to subparagraph "b" of Clause 185.1 of Article 185 of the Code of Civil Procedure, the object of taxation with value added tax is the operations of tax payers for the supply of services, the place of supply of which is located in the customs territory of Ukraine in accordance with Article 186 of the Code of Criminal Code.

According to Clause 188.1 of Article 188 of the Code of Civil Procedure, the tax base for operations on the supply of goods/services is determined based on their contractual value, taking into account state taxes and fees (except for excise tax on the sale of excise goods by business entities in retail trade, a fee for mandatory state pension insurance that covers the cost of cellular mobile communication services, value added tax and excise tax on ethyl alcohol, which is used by manufacturers - business entities for the production of medicinal products, including blood components and preparations made from them (except medicinal remedies in the form of balms and elixirs).

At the same time, the tax base for the supply of goods/services cannot be lower than the purchase price of such goods/services, the tax base for the supply of self-made goods/services cannot be lower than normal prices, and the tax base for the supply of non-current assets cannot be lower of the balance sheet (residual) value according to accounting data as of the beginning of the reporting (tax) period during which such operations are carried out (in the absence of accounting for non-current assets - based on the usual price).

The contractual (contract) value includes any sums of money, the value of tangible and intangible assets transferred to the taxpayer directly by the buyer or through any third party in connection with compensation for the value of goods/services.

Article 3 of the Law of Ukraine dated 12.07.2001 No. 2658-ІІІ "On valuation of property, property rights and professional appraisal activities in Ukraine" defines that property rights are any rights related to property other than ownership, including , which are constituent parts of property rights (rights of possession, disposal, use), as well as other specific rights (rights to carry out activities, use natural resources, etc.) and claim rights.

Therefore, based on the above, the transaction of transferring property rights to equipment to another business entity as a contribution to the authorized capital in the form of property rights to equipment - rights to use property is subject to taxation and is subject to taxation on a general basis at the basic rate.

VAT tax obligations upon the transfer of property rights to equipment to another business entity, as a contribution to the authorized capital, arise upon the transfer of such rights.

At the same time, the taxpayer who transfers property rights, in accordance with Clause 201.1 of Article 201 of the Code of Civil Procedure, must draw up a tax invoice in electronic form, subject to the condition of registering the electronic signature of a person authorized by the taxpayer in accordance with the procedure established by law, and register it in the Unified Register of Tax invoices within the term established by the Code.

Additionally:

Tax consultation - assistance of a controlling body to a specific taxpayer in relation to the practical use of a specific rule of law or regulatory act on matters of administration of the assessment and payment of taxes or fees, control over the implementation of which is entrusted to such a controlling body (subclause 14.1.172 clause 14.1 article 14 of the PKU) .

According to the provisions of Article 52 of the Tax Code of Ukraine, tax advice is of an individual nature and can be used only by the taxpayer to whom such advice was provided.

Controlling bodies have the right to provide consultations only on those issues that fall under their authority.

To receive the necessary information and comprehensive oral answers on tax legislation issues, you have the opportunity to contact the supervisory body in which you, as a taxpayer, are registered and the Information and Reference Department of the State Fiscal Service of Ukraine at the multi-channel telephone number 0-800-501- 007 (free from landlines). Working hours of the Information and Reference Department of the State Fiscal Service of Ukraine from 8:00 a.m. until 8:00 p.m. daily except Saturday and Sunday. Answers are also provided by the Contact Center of the State Fiscal Service of Ukraine by fax and e-mail via the Internet ( [email protected] )