SPECIAL “MILITARY” ZERO VAT RATE: APPLICATION RULES

With the introduction of martial law, many changes and additions are made to the tax legislation, which are necessary and relevant at this time. Not the last place in these changes is the application of a special "military" zero VAT rate. But in order not to make mistakes, you need to know in which cases and how to apply it correctly, so as not to create misunderstandings in the future.

What goods and services are covered

It is clear that "military" should be applied to goods supplied for military personnel. More specifically, this zero VAT rate applies to the supply of goods for the refueling or provision of military transport or to the supply of services. Such services include the repair and maintenance of vehicles for the needs of the Armed Forces.

Application of zero VAT rate

Every VAT payer for whom the application of the zero rate is provided must apply it. The payer does not choose whether to apply the zero VAT rate or not. There is no alternative in the tax legislation regarding its application, and therefore it is necessary to comply with the requirements of the legislation. That is, if it is provided for a specific type of activity, then it must be applied.

Which vehicles are covered

Resolution No. 178 does not specify any restrictions on the type of transport that is subject to zero-rate taxation. From this we can conclude that any vehicles that are serviced for military personnel. It can be both automobile and other types of transport.

To whom it does not apply

According to the explanations of the tax authorities, the zero rate of VAT cannot be applied to these business entities that supply goods that are used for vehicles indirectly. That is, these are gas stations, repair shops, and others.

How to confirm

The specified resolution does not specify which documents should be used to confirm that the specified goods (fuel storage modules (reservoirs), fuel dispensers, etc.) are used exclusively for refueling (refueling) or ensuring the transport of the Armed Forces. That is, there can be any documents confirming the provision of services exclusively for the needs of the Armed Forces, and not for other categories of the population.

So, as can be seen from the above, not all business entities can use and apply the "military" zero VAT rate in their activities. Resolution No. 178 outlines the range of entities that can apply a zero VAT rate.

But you need to understand that if you have any questions or doubts about the possibility of using the zero VAT rate, it is better to immediately get professional advice from specialists. After all, the help of specialists can protect the company from misunderstandings that may arise with the correct application of the zero VAT rate.