The Tax Service Explained How Enterprises of Persons with Disabilities Can Use the VAT Benefit During Martial Law
Enterprises and organizations established by public associations of persons with disabilities retain the right to apply the value-added tax benefit even in cases where the validity period of the relevant permit expired during martial law.
Current legislation provides that permits for the use of tax benefits, the validity of which expired during the period of martial law, are considered extended for the entire duration of martial law, as well as for two calendar quarters after its termination or cancellation.
The benefit applies to the supply of goods and services directly produced or provided by enterprises and organizations founded by public associations of persons with disabilities.
At the same time, the law establishes exceptions to which the VAT exemption does not apply. In particular, this concerns services in the field of lotteries and entertainment games, as well as certain intermediary operations carried out under commission, guarantee, agency, or trust management agreements without transfer of ownership rights.
To use the tax benefit, the enterprise must meet specified criteria. In particular, employees with disabilities working at the main place of employment must constitute at least 50 percent of the average number of full-time employees, and expenses for their wages must be at least 25 percent of the total wage fund.
If the established legislative requirements are not met, the enterprise loses the right to the preferential taxation regime, and tax liabilities are subject to calculation on a general basis with the application of prescribed financial sanctions.
The Tax Service recommends that enterprises regularly check compliance with the established criteria and properly prepare the documents necessary for the unhindered application of tax benefits.
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