The Tax Committee of the Public Council under the Ministry of Finance of Ukraine proposed establishing a working group at the Ministry of Finance that would comprehensively analyze the taxation of leasing payments made to non-residents and develop a draft generalized tax consultation (GTC). The decision was made following the first meeting devoted to the problem of ambiguous interpretations of the relevant tax rules. Tetiana Shevtsova, a member of the Public Council under the Ministry of Finance, told UNN in a comment.
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As UNN reported earlier, the ESB is investigating cases involving at least five air carriers, including MAU, "Konstanta Airline," "Urga," H3Operations, and "Skyline Express," over the alleged failure to pay an additional 15% tax on income of non-residents to the Ukrainian budget under aircraft leasing agreements. Investigators equate leasing payments with royalties and treat airplanes and helicopters not as means of transport but as "equipment."
Law enforcement officers received the analytical findings after the previous State Tax Service team published an article in 2024 proposing that leasing operations involving transport owned by non-residents of Ukraine be taxed as royalties. The documents, which according to representatives of the aviation market are similar to one another and appear to have been written "from the same template," formed the basis for criminal cases against air carriers.
Lawyers interviewed by UNN point out that investigators are ignoring the applicable international conventions on the avoidance of double taxation ratified by the Verkhovna Rada. According to them, automatically assessing an additional 15% tax in Ukraine without taking into account the provisions of a specific convention is, at the very least, disputable.
It is worth noting that, according to the State Tax Service, the airlines underwent tax audits, and violations in the taxation of leasing were established based on only one of them. The remaining tax audits did not identify such violations.
Representatives of Ukraine's aviation industry stated that civil aviation is at risk of destruction due to the actions of state regulatory authorities. According to them, the new interpretation of the taxation of aircraft leasing operations involving non-residents of Ukraine as royalties, criminal proceedings, and attempts to assess additional taxes for seven years could ultimately finish off companies that survived the closure of the airspace and relocation abroad due to the full-scale war
The Ministry of Finance will comprehensively examine the issue of aviation leasing
According to Tetiana Shevtsova, the issue of taxing leasing payments was submitted for consideration by the Tax Committee of the Public Council under the Ministry of Finance following a corresponding appeal from the Ukrainian Air Transport Association. Specialists from the relevant departments of the Ministry of Finance, representatives of associations, and members of the Public Council's Tax Committee took part in the meeting.
Following consideration of the association's appeal, the meeting of the Tax Committee of the Public Council under the Ministry of Finance of Ukraine considered the issue of taxing rental payments made to non-residents
According to Shevtsova, the meeting's participants unanimously agreed that the issue required a comprehensive analysis, taking into account not only the provisions of Ukrainian tax legislation but also international law.
They unanimously reached a decision on the need for a comprehensive examination of the issue raised, both from the standpoint of the definitions in the Tax Code of Ukraine and of International Agreements (Conventions) on the avoidance of double taxation and the OECD and UN Model Conventions
A working group is proposed to be established at the Ministry of Finance
At the same time, the problem extends beyond the aviation industry alone, since the approach to classifying rental payments made to non-residents also concerns other sectors of the economy. It is known that similar problems arose during the leasing of railway cars and agricultural machinery. That is why the Public Council's Tax Committee took the initiative to establish a special working group at the Ministry of Finance.
Also, given the relevance of the issue both to the aviation industry and to other sectors, the Tax Committee of the Public Council under the Ministry of Finance of Ukraine (the Ministry of Finance of Ukraine — ed.) took the initiative to establish a working group under the Ministry of Finance to develop a draft General Tax Consultation, with the involvement of representatives of the Public Council, the Ministry of Finance, and the State Tax Service
It is expected that the working group itself will thoroughly examine the legal grounds for taxing lease payments to nonresidents and prepare a draft General Tax Consultation. After that, the document is to be submitted for consideration by the Expert Council under the Ministry of Finance.
The General Tax Consultation could become a mechanism for establishing a unified approach by government authorities to the taxation of such transactions and eliminating differing interpretations of tax regulations, including by investigators of the Economic Security Bureau.
Initiating criminal prosecution against air carriers on the basis of a disputed interpretation of tax regulations, before the fact of a violation has been conclusively established, raises serious legal questions and places unjustified pressure on businesses.
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