Document from CIS Legislation database © 2003-2024 SojuzPravoInform LLC

LETTER OF THE STATE TAX SERVICE OF UKRAINE

of January 11, 2012 No. 574/6/15-1415

GNSU considered the letter of application of item 154.8 of Art. 154 of the Tax code of Ukraine regional power relatively (further - the Code) and reports.

The law of Ukraine of 07.07.2011 No. 3609-VI "About introduction of amendments to the Tax Code of Ukraine and some other legal acts of Ukraine concerning enhancement of separate regulations of the Tax code of Ukraine" makes changes, in particular, to item 154.8 of Art. 154 of the Code. However regulations of item 154.8 of Art. 154 of the Code are applied since 01.04.2011 with some amendments.

According to item 154.8 of Art. 154 of the Code the profit of the companies of energy industry within actual expenses which do not exceed the total annual amount is exempted from the taxation:

- provided by the investing programs approved by body which performs state regulation in the sphere of power industry and in the natural gas market, on capital investments on construction (to reconstruction, upgrade) interstate, high-level and distribution (local) power networks, power plants, combined heat and power plants, trunk gas pipelines, gas distribution networks, underground gas storages and establishment of counters of gas to the population, including the amounts directed to return of the credits which are utilized for financing of purposes aforesaid;

- provided by projects which financing is performed due to subjects of natural monopolies, producers of electrical and/or heat energy according to decisions of KMU;

- expenses within the investment component approved by body which performs state regulation in the sphere of power industry and in the natural gas market, necessary for return of the credits, investments, bond redemption (debt securities) issued (received) by the power generation companies, for the purpose of financing of capital investments on construction (to reconstruction, upgrade) the equipment of power plants and combined heat and power plants, according to the construction plan (reconstruction, upgrades) approved by KMU or the body authorized by it.

Regarding determination of actual expenses and their structure it is necessary to use the term "expenses" which is provided by subitem 14.1.27 of item 14.1 of Art. 14 of the Code: expenses - the amount of any expenses of the taxpayer in the cash, material or non-material forms performed for carrying out economic activity of the taxpayer from which reduction of economic benefits in the form of asset retirement or increase in obligations therefore there is reduction of equity results (except changes of the capital due to its withdrawal or distribution by the owner).

Thus, according to item 154.8 of Art. 154 of the Code the profit of the companies of energy industry within the actual expenses provided by investing program is exempted from the taxation, however in case of determination of limit of actual expenses the total annual amount of investing program is used.

The basis for confirmation of the actual expenses incurred within investing program on capital investments on construction (to reconstruction, upgrade) distribution (local) power networks are the settlement, payment and other source documents confirming implementation by the taxpayer of expenses according to item 138.2 of Art. 138 of the Code (delivery notes, acts of the performed works, payment orders, checks of RRO, bank statements and so forth).

Concerning construction expenses (reconstruction, upgrade) of distribution (local) power networks within item 154.8 of the Code.

Expenses on carrying out repair, reconstruction, upgrade and other types of improvement of fixed assets which exceed 10% of aggregate book value of all groups of the fixed assets which are subject to depreciation for the beginning of accounting year are subject to depreciation (the paragraph the fourth item 144.1 of Art. 144 of the Code).

Besides, primary fixed asset cost increases by expense amount, connected with repair and improvement of fixed asset objects (upgrade, modification, completion, additional equipment, reconstruction) that leads to increase of the future economic benefits which are initially expected from use of objects in the amount which exceeds 10% of aggregate book value of all groups of the fixed assets which are subject to depreciation for the beginning of accounting tax year with reference of the amount of improvement on object of fixed asset concerning which repair and improvement (item 146.11 of Art. 146 of the Code) is performed.

The expense amount which is connected with repair and improvement of the fixed asset objects including leased or received in concession or created (constructed) by the concessionary in the amount of not exceeding 10 percent of aggregate book value of all groups of fixed assets for the beginning of accounting year, belongs to expenses of that accounting tax period in which such repair and improvement were performed (item 146.12 of Art. 146 of the Code).

 

Vice-chairman A. Ignatov

 

Disclaimer! This text was translated by AI translator and is not a valid juridical document. No warranty. No claim. More info

Effectively work with search system

Database include more 50000 documents. You can find needed documents using search system. For effective work you can mix any on documents parameters: country, documents type, date range, teams or tags.
More about search system

Get help

If you cannot find the required document, or you do not know where to begin, go to Help section.

In this section, we’ve tried to describe in detail the features and capabilities of the system, as well as the most effective techniques for working with the database.

You also may open the section Frequently asked questions. This section provides answers to questions set by users.

Search engine created by SoyuzPravoInform LLC.