Assistance to Ukraine with 0% VAT
The Minister of Finance has issued an ordinance that introduces a 0% VAT rate for all free-of-charge supplies of goods or provision of services offered for purposes related to helping victims of the effects of warfare in Ukraine.
The Ordinance introduces the 0% VAT rate for all free-of-charge supplies of goods and provision of services offered for the purposes related to assistance to victims of the consequences of warfare in Ukraine. The material scope of the preference is open.
The 0% VAT rate applies to supplies offered to entities that constitute an essential link in the organization of assistance and distribution of benefits necessary for people in emergency situations. The reduced VAT rate covers services provided to: the Agency of Strategic Reserves, medical entities and territorial self-government units, i.e. entities fulfilling the function of key coordinators and, in a way, intermediaries for granted assistance.
Of course, it will be important to document such assistance in order to benefit from the preference. The 0% VAT rate will apply when a written agreement is concluded between the taxpayer and one of the indicated entities, from which it will result that the donated goods or services will be related to the assistance of victims of the war in Ukraine. As explained by the Ministry of Finance, a donation agreement may take the form of, for example, an electronically signed declaration of intent or a scan of a handwritten agreement signed by the donor, sent by e-mail to the entity for the benefit of which the gratuitous services are performed. The documents sent in this way should also be signed by the recipients of the benefits. It should be evident from the documentation that the declaration of will was made by both parties.
The zero VAT rate for the indicated transactions will be applicable from 24 February to 30 June 2022. There is an option to extend it after that date, if necessary – assures the MF.