News

❗ More than 14 thousand people in Kyiv region alone may not get housing!

🌐On July 24, 2024, during the roundtable discussion on the topic "Solving the problem of VAT in matters of housing construction with state funds", the issue of possible exemption from value added tax (VAT) of operations for the supply of construction and installation works carried out at the expense of the Fund for the Liquidation of the Consequences of Armed Aggression (hereinafter - the Fund for the Liquidation) was discussed.

👤The roundtable was moderated by Lev Partskhaladze, President of CBU, who noted: "We faced a problem that can complicate, and in some cases even stop, the housing reconstruction process in the future. The problem lies in the fact that contracting organizations that concluded construction contracts with funds from the Fund for the Liquidation began to face the risks of a possible refund of the VAT they paid for operations of construction and restoration of damaged housing with state funds. To understand the importance of the situation, more than 100 objects are being restored in the Kyiv region alone. In particular, 48 residential objects with an approximate total estimated cost of UAH 3.936 billion, where the customer is the Service for Reconstruction and Development of Infrastructure in the Kyiv Region and an additional 56 objects, where the customer is the Department of Regional Development of the Kyiv Regional Military Administration. The estimated number of people waiting for the completion of works and return to their homes in one region alone is more than 14 thousand. And all this is now under threat of stopping."

The roundtable discussion was attended by:

👤Olena Shuliak, Head of the VRU Committee on State Building, Local Governance, Regional and Urban Development, Head of “Servant of the People”

👤Olha Vasylevska-Smaglyuk, Deputy Chairman of the VRU Committee on Finance, Taxation and Customs Policy

👤Maxim Pogrebnyak, Head of the Department of Financial and Economic Monitoring of the State Agency for Reconstruction and Development of Infrastructure of Ukraine

👤More than 50 contracting companies working with tenders for state funds

🔎 Roman Ivanenko, Owner of "Trest KMB-3" LLC, in a presentation described the problem, reminding that the norm of clause 197.15 of Art. 197 of the Tax Code of Ukraine regarding the exemption from VAT for operations of the supply of construction and installation works for the construction of affordable housing and housing built with state funds was related to the Law of Ukraine "On preventing the impact of the global financial crisis on the development of the construction industry and housing construction" - this is confirmed by numerous clarifications from the State Tax Service of Ukraine and the former Ministry of Revenue and Duties for the years 2009-2023.

Attempts by the State Tax Service of Ukraine to re-explain the application of this article of the Tax Code of Ukraine regarding restoration works at the expense of funds from the Fund for the Liquidation of the Consequences of Armed Aggression provide the possibility of a double interpretation and allow the State Audit Service of Ukraine to unjustifiably demand the return of VAT already paid by companies.

💬“When we execute reconstruction contracts, we pay for materials, subcontractors, rent or buy equipment - all these payments include VAT. If we have already paid VAT everywhere, then attempts to demand the return of what has already been paid simply do not have any rational basis, it is a mistake", Roman Ivanenko explained the technical difficulties of the new interpretation.

💬 "A rocket that arrived but did not explode" - this is how the representatives of the contracting companies commented on the current situation.

💬"It is precisely because of such legal conflicts that we risk leaving people homeless and delaying important reconstruction projects. Currently, the developers are completing the projects at the expense of their own financial resources, but in the future we will have a complete stop of the reconstruction of residential buildings", - said Olena Shulyak.

She also assured the participants that she plans to contact the Cabinet of Ministers of Ukraine and the Prime Minister of Ukraine Denys Shmygal, in order to find ways to solve this issue. 

Non-regulation of this issue has already led to the suspension of financing of housing restoration projects by the customer, the exhaustion of the own financial capabilities of subcontractors, and the complete suspension of such projects already today.

In order to settle the raised issue, it was proposed to submit to the Verkhovna Rada of Ukraine for consideration a draft law on suspending the operation of clause 197.15 of article 197 of the Tax Code of Ukraine for the period of martial law.

Olha Vasylevska-Smaglyuk offered to become one of the co-authors of such a draft law, registering it in the VRU as soon as possible.

WE WILL WIN AND REBUILD EVERYTHING! 💪

TOGETHER TO VICTORY! 

GLORY TO UKRAINE! 💙💛