In accordance with paragraphs 196.1.2 TCU is not subject to taxation, in particular, transactions with:
- transfer of property to storage (responsible storage), concession, as well as leasing (rent), except transfer to financial leasing;
- return of property from storage (responsible storage) to its owner, as well as property previously transferred to a concession or lease (rent) to a concessionaire or lessor (lessor), except for financial leasing.
Therefore, the transfer of property for operational leasing (rent), as well as the return of such property to its owner, is not subject to VAT taxation.
According to paragraphs 14.1.185 TCU supply of services – any operation that is not the supply of goods, or any other operation on the transfer of rights to objects of intellectual property rights and other intangible assets or the granting of other property rights in relation to such objects of intellectual property rights, and as well as the provision of services that are consumed in the process of committing a certain action or carrying out a certain activity.
In accordance with Part 1 of Art. 283 TCU under a lease agreement, one party (the lessor) transfers to the other party (the lessee) for a fee for a certain period the ownership and use of property for economic activity.
Subparagraph “b” of Clause 185.1 of the Code of Civil Procedure defines that the object of taxation is the operations of taxpayers for the supply of services, the place of supply of which is located in the customs territory of Ukraine, in accordance with Art. 186 TCU.
Taking into account the above, when the VAT payer carries out operations on the transfer of property for operational leasing (rent), the object of VAT taxation is the value of the services provided within the framework of the leasing (rent) contract, i.e. the amount of leasing (rental) payments is subject to taxation in the generally established manner at the basic rate.