Explanation of Minrevenue

Taxpayer receiving repayable financial assistance from the taxpayer of income tax under the regular system in the base reference period must include the amount of conditionally accrued interest in taxable income. The latter is calculated on the amount of repayable financial assistance remaining at the end of the basic reporting period. Calculation is based on the rate of the National Bank of Ukraine for each day of actual use of such assistance. If the tax return on income tax is filed annually, the Declaration shows the total amount of interest accrued on the amount of conditionally repayable financial assistance during the year.

If the taxpayer received repayable financial assistance from individuals who do not pay this tax or persons under the Tax Code of Ukraine having the benefits of this tax, during the reference reporting period, then the taxpayer must include the amount of repayable assistance (the remaining part) in income at the end of the reporting period. The appropriate amount should be reflected in the Declaration (including the part of the annual declaration which is submitted every year). When such amount of repayable financial assistance (part of it) is returned in the next fiscal periods, the person increases the amount of expenses in the amount of such repayable financial assistance. This amount is reflected in the Declaration (including as part of the annual declaration to be filed annually).

Let’s remind that repayable financial assistance is the amount of money that came to the taxpayer for use under a contract that does not include the accrual of interest or provide other types of compensation in the form of fees for the use of such funds, and is obligatory to return (c. 14.1.257 of p.14.1 Article 14 of the Tax Code of Ukraine).