The Ministry of Finance of Ukraine has legally established mechanisms for resolving discrepancies concerning the taxation of aircraft leasing from non-residents. A generalized tax consultation would ensure a uniform approach to interpreting such transactions and protect taxpayers from sanctions and criminal prosecution. Sviatoslav Bolinskyi, CEO of the Bolinskyi and Team law firm and an attorney, expressed this view in an exclusive comment to UNN.
The Ministry of Finance may resolve the ambiguity in the interpretation of aircraft leasing
The problem of taxing leasing payments by Ukrainian airlines to non-residents remains unresolved despite complaints from aviation industry representatives about pressure from the Economic Security Bureau. As UNN previously reported, in 2024 the ESB began to interpret payments for the use of leased aircraft as royalties, which served as grounds for initiating criminal proceedings against at least five airlines. Investigators independently changed the interpretation of the transactions without corresponding amendments to tax legislation or international conventions on the avoidance of double taxation.
Representatives of the aviation industry point out that aircraft leasing is a global practice and that no country interprets it as royalties. To resolve the situation, they approached the Ministry of Finance of Ukraine, which, as the regulator, can put an end to differing interpretations of the legislation. The Ministry of Finance agreed to develop a generalized tax consultation to resolve the problem. The Ukrainian Air Transport Association has now established a working group to prepare specific examples of the incorrect interpretation of leasing transactions and develop a draft generalized tax consultation, which it plans to submit to the ministry by October 14.
According to lawyer Sviatoslav Bolinskyi, the Ministry of Finance has the necessary powers to ensure legal certainty on this issue.
"In accordance with the Regulation on the Ministry of Finance of Ukraine, approved by Resolution No. 375 of the Cabinet of Ministers of Ukraine dated August 20, 2014, the Ministry of Finance is the central executive body responsible, among other things, for formulating and implementing unified state tax and customs policy, as well as state policy in the field of combating offenses in the application of tax and customs legislation," the lawyer noted.
He explained that the legislation provides for a special mechanism to eliminate ambiguities in the application of tax provisions, namely, a generalized tax consultation (GTC).
In particular, pursuant to Ministry of Finance Order No. 811 dated September 27, 2017, grounds for providing such a consultation may include circumstances indicating ambiguity in certain provisions of tax legislation. In the case of aircraft leasing, the ambiguity lies in the fact that, until 2024, tax and law enforcement authorities had raised no claims regarding aircraft leasing and had not attempted to interpret these transactions as royalties.
Thus, the Ministry of Finance has the tools to regulate issues related to the interpretation of aircraft leasing and the relevant payments, as well as their legal nature, through the instrument of a generalized tax consultation, which is approved by an order
This is not about the need to adopt a new law or amend the Tax Code, but about establishing a uniform approach to applying the provisions already in force, including with consideration of international treaties ratified by Ukraine.
A tax consultation can protect airlines from fines
An important aspect of a generalized tax consultation is the guarantees provided by the Tax Code for taxpayers who act in accordance with its provisions.
According to Bolinskyi, after the relevant GTC is approved by an order of the Ministry of Finance, taxpayers who follow it in their activities receive legally defined protection from liability for the respective actions.
If the order has been issued, in such a case the taxpayer (tax agent and/or its official) who acted in accordance with the general tax consultation may not be held liable, including financially (penalties and/or late-payment interest), for acts containing signs of a tax offense, in particular on the grounds that the tax consultation was subsequently amended or revoked
Thus, the adoption of a general tax consultation could become an important safeguard against new claims by tax or law enforcement authorities. Airlines will receive clear tax rules for leasing transactions, while government bodies will have a single guideline for applying the relevant provisions of the law.
At the same time, the consultation itself does not change the provisions of the Tax Code or international treaties, but should explain the procedure for applying them.
According to Sviatoslav Bolinskyi, the key question is whether the detectives of the Economic Security Bureau will pay attention to the Ministry of Finance's clarification.
Therefore, in Bolinskyi's opinion, it is important that, when preparing the general tax consultation, the Ministry of Finance take into account the need to regulate the situation not only for the future, but also with regard to transactions from previous years.
At the same time, it is apparently possible for the Ministry of Finance to issue a general tax consultation and extend its effect to a situation that arose earlier, but whether the Ministry of Finance will provide for this remains to be seen
The consultation may contain clarifications of provisions that were in effect at the time the payments were made; however, this does not mean the automatic termination of criminal proceedings or the reversal of decisions adopted earlier. That is why it is fundamentally important for the aviation industry that, when preparing the general tax consultation, the Ministry of Finance take into account not only future transactions but also existing tax disputes.