The head office of the DPS in Kyiv informs that the creditor in the obligation may be replaced by another person as a result of his transfer of his rights to another person by deed (assignment of the right of claim). The deed regarding the replacement of the creditor in the obligation is performed in the same form as the deed on the basis of which the obligation arose, according to which the right of claim is transferred to the new creditor. The rights of the original creditor in the obligation are transferred to the new creditor in the amount and on the terms that existed at the time of the transfer of these rights, unless otherwise established by contract or law (Articles 512-516 of the Civil Code of Ukraine dated January 16, 2003 No. 435 -IV with changes and additions).
The debt transfer agreement (replacement of the debtor in the obligation) is usually concluded in the form of a tripartite agreement (creditor, original debtor, new debtor).
According to paragraphs 14.1.255 clause 14.1 of Art. 14 of the Tax Code of Ukraine dated December 02, 2010 No. 2755-VI assignment of the right of claim – the transaction of assignment by the creditor of the right to claim the debt of a third party to a new creditor with prior or subsequent compensation of the value of such debt to the creditor or without such compensation.
Formation of tax liabilities from value added tax and tax credit for sales and purchase of goods (services) is carried out in accordance with item 187.1 of article 187 and items 198.1, 198.2 of article. 198 PKU.
The conclusion of a debt transfer agreement does not lead to VAT tax consequences, since it transfers an obligation that is not a good or service.
According to clause 185.1 of Art. 185 of the Code of Administrative Offenses, the object of VAT taxation is the operations of payers for the supply of goods, the place of supply of which is located in the customs territory of Ukraine, in accordance with Art. 186 PKU.
Since the debt transfer operation does not involve the supply of goods/services, but creates an obligation to perform a certain action for the benefit of the other party (the creditor), namely to pay money, the parties do not have VAT tax obligations for such an operation.
At the same time, each specific case of taxation, the consequences of which are operations on the assignment of the right of claim, should be considered taking into account the documents related to this case. In order to provide a more detailed answer to the issues raised, we suggest applying for individual tax advice to the controlling authorities in accordance with Art. 52 PKU.
Source: kyiv.tax.gov.ua
