The Ministry of Finance of Ukraine should establish a unified approach to the taxation of airline leasing payments to non-residents of Ukraine as soon as possible. Further uncertainty on this issue creates serious risks for the aviation business, which is facing fiscal and criminal pressure due to differing interpretations of the legislation by government agencies. Hryhoriy Katamadze, President of the Association of Taxpayers of Ukraine, expressed this view in an exclusive comment to UNN.
Criminal cases over the interpretation of aviation leasing as royalties
As UNN previously reported, since 2024 the Economic Security Bureau has begun interpreting transactions involving the leasing of air transport from non-residents of Ukraine as the use of equipment. According to the investigators' version, Ukrainian air carriers should have paid royalties for leasing airplanes and helicopters. Based on this approach, the ESB opened criminal proceedings against at least five air carriers, including Ukraine International Airlines, Constanta Airline, Windrose, N3Operations, and Skyline Express. According to UNN, another airline, Urga, may also be involved in a similar case.
The criminal cases were opened despite the fact that almost all the air carriers had successfully passed tax audits, and the tax authorities' leasing-related objections concerned only one company.
Representatives of the aviation industry insist that the problem arose because of an ambiguous interpretation of the legislation and requires the establishment of a unified state approach.
In response to a request from UNN, the Ministry of Finance reported that the taxation of transactions involving the leasing of aircraft 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 described as pressure that could destroy an entire sector of passenger and transport services. After all, according to data from 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 brought before the Tax Committee of the Public Council under the Ministry of Finance. Following the first meeting, it was decided to initiate the establishment of a working group under the Ministry of Finance, which is to develop a draft generalized tax consultation on the taxation of leasing payments to non-residents.
Businesses need legal certainty
Hryhoriy Katamadze, President of the Association of Taxpayers of Ukraine, emphasizes that when government agencies interpret the same business transactions differently, this deprives businesses of the ability to forecast tax consequences and properly plan their activities.
The Ministry of Finance should consider the issue of taxing Ukrainian airlines' leasing payments to non-residents as soon as possible and put an end to the divergent interpretations that are currently creating serious risks for the aviation business. When government agencies interpret the same transactions differently, and such interpretations result in multimillion-hryvnia tax claims and criminal proceedings, businesses cannot properly plan their activities. And amid a full-scale war and constant Russian strikes, it is already difficult for businesses to operate in Ukraine
He believes that the development of a unified approach to the taxation of aviation leasing must not be delayed. Above all, this concerns ensuring the principle of legal certainty, under which companies can understand their tax obligations in advance rather than learn of a new interpretation only after claims have been raised by government agencies.
Airlines simply need legal certainty: they must understand which tax obligations they are required to fulfill. Resolving this issue is important not only for individual carriers. It concerns preserving Ukraine’s aviation industry and creating normal conditions for its recovery after the war ends
The President of the Ukrainian Taxpayers Association believes that all parties, including representatives of the aviation industry, should be involved in the Finance Ministry’s development of a unified approach that will be mandatory for state bodies to apply.
I hope that the Ministry of Finance will carry out the necessary work as quickly as possible, involving all parties, and formulate a unified approach that both tax and law enforcement authorities will subsequently follow. Businesses should not become hostages to contradictory interpretations of legislation by state bodies. Pressure on business will certainly not produce a positive result for the state