The forthcoming generalized tax consultation (GTC) of the Ministry of Finance on the taxation of lease payments to nonresidents may become an argument in existing disputes surrounding aircraft leasing. It will not automatically exempt businesses from liability for past periods, but it may confirm that the tax provision allowed for different interpretations. Tax planning expert Olena Kuznechikova explained in a comment to UNN what such a tax clarification from the Ministry of Finance is and whether compliance with it is mandatory.
Can the new GTC be cited in an old dispute?
According to Kuznechikova, the classical principle that a legal act has no retroactive effect does not apply to a generalized tax consultation. The reason is that the Ministry of Finance’s GTC is not, in itself, a regulatory legal act and does not create new taxation rules; it only explains how existing provisions should be applied.
Formally and legally, the rule that "an act has no retroactive effect in time" does not apply to a GTC—precisely because it is not a regulatory legal act and does not establish new rules. It interprets a provision that was already in force. Therefore, no one prevents it from being cited in a dispute concerning 2019, and courts accept such references
Thus, if the Ministry of Finance approves a clarification concerning a particular disputed issue, taxpayers will be able to use its position not only in future transactions but also as an argument in existing disputes.
As Kuznechikova explained, a generalized tax consultation does not automatically release a taxpayer from liability for transactions carried out before it was issued. However, the Tax Code provides for exemption from financial liability for a person who acted in accordance with a generalized tax consultation.
Therefore, in old disputes, the GTC’s direct protective mechanism is somewhat limited.
GTC as official confirmation of ambiguity in legislation
At the same time, according to the expert, for existing disputes the very fact that the Ministry of Finance had to issue a generalized consultation may be much more important. This confirms the existing ambiguity in the application of certain provisions of tax legislation. In other words, the adoption of a GTC may become an additional argument in favor of the view that the relevant tax provision genuinely allowed for different interpretations.
And this is already significant in view of the presumption, established by the Tax Code, that taxpayers’ decisions are lawful.
The Ministry of Finance issues GTCs, among other reasons, when circumstances indicate that a provision is ambiguous. In other words, by its own order, the state officially certified that the provision is ambiguous. And this is a direct bridge to subparagraph 4.1.4 and paragraph 56.21 of the Tax Code—the presumption that a taxpayer’s decisions are lawful where multiple interpretations are possible. Sometimes a GTC is more useful as evidence of fog than as a source of light
This particular aspect may be of fundamental importance for disputes that arose before the consultation was approved. A taxpayer may rely not only on the Ministry of Finance’s specific interpretation but also on the fact that the need for such clarification confirms the absence of a uniform state approach to applying the relevant provision.
What this could mean for disputes surrounding aircraft leasing
This issue is becoming particularly important against the backdrop of the discussion concerning the taxation of aircraft leasing transactions. Starting in 2024, the Economic Security Bureau decided to interpret aircraft leasing as royalties. According to the investigation, the relevant payments to nonresidents were to be taxed as royalties, including through the application of a 15% rate of tax on nonresident income.
In connection with this, the ESB opened criminal proceedings against at least 5 air carriers, including MAU, "Constanta Airline," "Roza Vetrov," N3Operations, and "Skyline Express." According to UNN, another airline—"Urga"—may also feature in a similar case.
Criminal proceedings were opened despite the fact that almost all air carriers successfully passed tax audits, and the tax authorities' only leasing-related remark concerned a single company.
Representatives of the aviation industry insist that the problem arose because of an ambiguous interpretation of legal provisions and requires the development of a unified state approach.
In response to a request from UNN, the Ministry of Finance said that the taxation of aircraft leasing transactions is carried out in accordance with the Tax Code and Ukraine's international treaties. At the same time, the Tax Code of Ukraine does not provide for the possibility of taxing aviation leasing as royalties. Therefore, the Bureau's approach to interpreting aviation leasing without amending the tax legislation is being called pressure that could destroy the entire passenger and freight transportation industry. After all, according to the State Register of Civil Aircraft of Ukraine, 86% of the aircraft fleet of Ukrainian companies is leased.
That is why the issue of aviation leasing was submitted for consideration by the Tax Committee of the Public Council under the Ministry of Finance. Following the first meeting, it was decided to initiate the creation of a working group under the Ministry of Finance, which is to develop a draft general tax consultation on the taxation of lease payments made to nonresidents.
When the Ministry of Finance finally approves the GTC, its significance may extend far beyond future leasing transactions. It could potentially become an additional important argument in existing disputes that arose because of differing interpretations of the nature of payments for the use of aircraft.
It will be particularly important to confirm that the issue required a separate general clarification from the Ministry of Finance. After all, if the state was forced to develop a unified approach because of ambiguity in practice, this raises the question of how justified it is to hold businesses liable for applying one of the possible interpretations during a period when such a unified approach did not yet exist.