4.2 Problems of formation and use of the special fund of the Budget by institutions of higher education of Ukraine

In this case, the benefit under the code 14060524 «Exempt from taxation of transactions for the supply of goods and services in the customs territory of Ukraine, financed by international technical assistance provided in accordance with international treaties of Ukraine, consent to be binding in the manner prescribed by law» contains a reference to para- graph 197.11 of the TCU.

However, Procedure No. 153 does not apply to projects (programs) funded by the North Atlantic Treaty Organization (NATO) under the Agreement between the Government of Ukraine and the North Atlantic Treaty Organization on the status of NATO Representa- tion in Ukraine.

Therefore, transactions for the supply of goods, works and services under an international technical assistance project registered in accordance with Procedure No. 153 are exempt from VAT under paragraph 197.11 of the TCU, and NATO-funded projects are exempt under paragraph 3.2 of the TCU and the Agreement with NATO. According to the norm of item 3.2 of the TCU, if an international agreement, the binding nature of which has been approved by the Verkhovna Rada of Ukraine, establishes rules other than those provided for by this Code, the rules of the international agreement shall apply.

At the same time, the situation with the accrual of «compensatory» VAT liabilities for goods (services) used in the supply of goods (services) for projects financed by NATO under the NATO Agreement is currently unresolved.

Thus, according to paragraph 198.5 of the TCU, the taxpayer is obliged to accrue tax liabilities based on the tax base determined in accordance with paragraph 189.1 of the TCU, and make no later than the last day of the reporting (tax) period and register in the Unified Register of tax invoices. the terms established by this Code for such registration, consolidated tax invoice for goods/services, non-current assets purchased/manufactured with value added tax (for goods/services, non-current assets purchased or manufactured before July 1, 2015 – if under at the time of such acquisition or production the amount of tax was included in the tax credit), if such goods/services, non-current assets are intended for their use or begin to be used:

a) no adjustment required;

b) in transactions exempt from taxation in accordance with Article 197, Subsection 2 of Section XX of this Code, international treaties agreements, (except for transactions provided for in subparagraph 197.1.28 of paragraph 197.1 of Article 197 of this Code and transactions provided for in paragraph 197.11 of Article 197 of this Code).

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