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of June 19, 2012 No. 10330/6/15-3415-2645

The State Tax Service of Ukraine considered letters '...' concerning the taxation the value added tax for the services connected with transit transportation of goods also reports.

According to Item 197.8 of article 197 of the Tax Code of Ukraine of 02.12.2010 No. 2755-VI (further - the Code) are exempted from the taxation by the transaction value added tax on delivery of services in transportation (movement) of passengers and freights en route through customs area of Ukraine, and also delivery of the services connected with such transportation (movement).

According to article 1 of the Law of Ukraine of 20.10.99 No. 1172-XIV "About transit of freights" (further - the Law No. 1172-XIV) transit of freights is transportation by vehicles of transit of transit cargoes under customs control through the territory of Ukraine between two Items or within one check point through frontier of Ukraine, and transit services (works) are the business activity of participants of transit which is directly connected with transit of freights which is performed within agreements (contracts) of transportation, freight forwarding, the order, agency agreements and so forth.

According to Article 200 of the Customs code of Ukraine the tranzittamozhenny mode according to which goods and vehicles move under customs control between two customs authorities or within zone of activities of one customs authority without any use of such goods and vehicles on customs area of Ukraine.

According to article 7 of the Law No. 1172-XIV transit services (works) intend for consumption and use outside customs area of Ukraine and are provided (are carried out) based on corresponding two - or multi-lateral agreements (contracts) between participants of transit.

In turn, participants of transit according to article 1 of the Law No. 1172-XIV are freight owners and subjects of business activity (carriers, ports, stations, freight forwarders, marine agents, customs applicants and others) who in accordance with the established procedure provide (carry out) transit services (works).

By article 4 of the Law No. 1172-XIV it is determined that transit of freights can be performed in the direct or mixed (combined) message. In through traffic transit of freights provides their transportation by one mode of transport without overload on another. In mixed traffic transit of freights can be connected with their overload from one mode of transport on others, conversion, sorting, packaging, obmerivaniye, accumulation, forming or crushing of batch of transit cargo, temporary storage and so forth. Such transactions are performed in customs control zones only at the choice of the freight owner (authorized by him persons).

According to part two of article 7 of the Law No. 1172-XIV agreements (contracts) on provision (accomplishment) of transit services (works) consist both between residents and nonresidents, and between residents and nonresidents who freely choose complex of transit services (works), their predostavitel (contractors), and also means of transit, depending on conditions of transportations.

By article 5 of the Law No. 1172-XIV it is determined that transit cargoes can be dry, liquid, bulked, breakbulk, piece bulk cargoes, and also transit vehicles which reckon as checkpoints through the territory of Ukraine if passing of these freights with overload, warehousing, crushing on batch, change of the vehicle of transit or without such transactions is part of complete route of transportation which begins and comes to an end outside the territory of Ukraine.

Documentary confirmation of transportation of goods in transit is superimposed UMVS (SMGS), TsIM(SIM), the unified superimposed TsIM/UMVS (TsIM/SMGM) and the transit customs declaration UMVS TR 80, which move to customs authorities for implementation of customs control.

Taking into account the specified transport documents railway stations by transfer of freights to other participants of transit based on instruction sheets of giving of cars, messages and instruction sheets of zabiraniye of cars charge service fee, connected with transportation of goods, including in transit through the territory of Ukraine (for giving, zabiraniye, nakatyvaniye or rolling-out, use of cars, their washing and the message on their arrival, on shunting work of the locomotive, storage, weighing, check of mass of freights and so forth) with further reflection of the specified payments in accumulative cards, sheets of payment for giving, zabiraniye of cars and shunting work, sheets of payment for use of cars according to Instructions for use as cars and containers, approved by the order of Ministry of Transport of Ukraine of 25.02.99 No. 113, with the made changes by the order of 01.12.2008 No. 1454, the Collection of cargo rates by rail within Ukraine and the related services and Coefficients which are applied to this Collection, the Rules of transportation of goods approved by the order of the Ministry of Transport and Communications of Ukraine of 26.03.2009 No. 317, which are issued based on article 5 of the Charter of the railroads of Ukraine approved by the resolution of the Cabinet of Ministers of 06.04.98 No. 457.

Freedom of transit of freights is provided with article 3 of the Law No. 1172-XIV in the way:

• lack of any discrimination concerning participants of transit, transit cargo on the basis of its place of origin, departure, import, export or appointment or in connection with circumstances which belong to the property right to this freight or to the vehicle of transit, place of registration or flag of the last, and also in case of the taxation of the transactions connected with transit of freights behind exceptions of adequate response to discrimination actions concerning Ukraine or economic sanctions of the international organizations supported by Ukraine;

• the free choice by participants of transit of transit services, works (except the cases determined by the laws and international treaties of Ukraine), their predostavitel (contractors), means of transit, and also transit routes;

• lack of unreasonable delays and restrictions, including concerning means of transit, and exemption of any other payments, except single collection which is levied at check points through frontier of Ukraine.

Based on stated the listed above additional services connected with transportation of goods transit which are levied according to the separate internal documents (to accumulative cards, sheets of payment for representation, zabiraniye of cars and shunting work, to sheets of payment for use of cars) approved by orders of the Ministry of transport of Ukraine and registered in the Ministry of Justice of Ukraine are exempted from the taxation by the value added tax if these services belong to cars, transit on numbers, confirmed with copies of CIM documents (SIM), UMVS (SMGS) or TsIM(UMVS).


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