Criminal proceedings of the Bureau of Economic Security against Ukrainian airlines are based on the false assumption that payments for leasing aircraft from non-residents are royalties. This interpretation contradicts Ukrainian tax legislation, international conventions on the avoidance of double taxation, and judicial practice. Lawyers, auditors, and tax consultants reached this conclusion during a roundtable discussion on the problems of aviation leasing taxation, reports UNN.
The BES is investigating a number of criminal proceedings against Ukrainian airlines, believing that carriers should have paid an additional 15% tax on non-resident income, since payments for aircraft leases are allegedly royalties. At least five airlines have suffered from this approach, including MAU, "Aviation Company Constanta", "Urga", N3Operations, and "Skyline".
Experts call the biggest contradiction of the situation the fact that most airlines have already undergone tax audits precisely for the periods that have now become the subject of BES criminal proceedings.
According to the State Tax Service, airlines passed tax audits, and only based on the results of one of them was a violation of leasing taxation established. The rest of the tax audits did not reveal such violations.
Based on the results of one audit of companies in the aviation industry, leasing payments were reclassified as royalties. Only one audit
Despite this, law enforcement officers returned to the same transactions with a new interpretation of the law. Carriers are being forced to pay an additional 15% royalty for the last 7 years, i.e., retroactively.
A new approach to taxing aircraft leasing could destroy Ukrainian civil aviation13.07.26, 13:24
Certified auditor and tax consultant Tetiana Shevtsova, who is a member of the Public Council under the Ministry of Finance, emphasized that the international conventions on the avoidance of double taxation, which law enforcement officers refer to, do not provide grounds for automatically equating aircraft lease payments to royalties.
According to her, even the Comments to the OECD Model Convention, which the Ukrainian tax service traditionally uses when interpreting international agreements, explain that references to equipment leasing concern specific cases of transferring innovative technologies or production processes, not ordinary leasing of vehicles, which include airplanes and helicopters.
Furthermore, the expert drew attention to the fact that Ukrainian legislation does not classify leasing as part of the definition of royalties at all.
The definition of royalties in Ukrainian legislation does not include leasing. Moreover, a separate type of non-resident income under Ukrainian legislation is lease payments. And airplanes, containers, wagons – they are not equipment, they are vehicles
In her opinion, it is precisely because of this that the current attempts by the BES to interpret leasing as the use of intellectual property look "so strained" that the issue requires a comprehensive review involving specialists from the Ministry of Finance, the State Tax Service, and the expert community.
The managing partner of the law firm LAW GUIDE, international taxation expert Olena Kuznechikova, holds the same position. She noted that the problem lies not in the absence of legislation, but in the distortion of the practice of its application.
According to the lawyer, the same international leasing transaction, depending on the specific convention, may fall under different articles of international treaties, including business activities, transport, other income, or lease payments. That is why a universal interpretation of all such transactions as royalties is legally unfounded.
She also reminded that in case of ambiguity, the Tax Code provides for the application of the principle of presumption of legality of taxpayer decisions. "If something can be interpreted both in favor of the budget and in favor of the taxpayer, it must be interpreted in favor of the taxpayer," Kuznechikova explained.
The expert also drew attention to another important fact: the official position of the tax authorities regarding aviation leasing changed only in 2024, although the contracts themselves of most airlines remained unchanged for years.
The previous team of the State Tax Service in 2024 published an article in which it proposed to consider transport leasing as royalties. In this publication, the State Tax Service notes that from 2017 to 2023, companies paid 13.1 million UAH of income in the form of leasing to non-residents and did not pay 15% royalties in Ukraine.
Until 2024, no questions arose from law enforcement agencies that someone intentionally underpaid any significant funds to the budget. They are now reviewing previous periods as well
Experts expressed separate criticism regarding the involvement of the BEB in these disputes. According to Kuznechikova, opening criminal proceedings before even an agreed tax liability exists contradicts the very logic of tax legislation.
A criminal case should actually begin only when an agreed tax liability arises... Not earlier. But this is according to the law, not according to its practice of application in this country
Experts emphasize that the situation has long gone beyond an ordinary tax dispute. It creates legal uncertainty for the entire aviation industry, which even under conditions of full-scale war continues to operate, fulfill international contracts, and pay taxes in Ukraine.
If the practice of criminal prosecution based on a new interpretation of norms that have been applied differently for decades becomes a precedent, similar risks may arise for other sectors of the economy that work with international agreements.
That is why the participants of the discussion point to the need for state intervention, in particular by the Ministry of Finance, and the establishment of uniform law enforcement. In their opinion, only a clear state position can stop the practice of arbitrary interpretation of international conventions, remove legal uncertainty, and prevent further pressure on Ukrainian civil aviation by law enforcement officers.