The State Tax Service of Ukraine (hereinafter – the STS) has explained some tax issues of payable financial assistance in the Letter dated February 11, 2013 N1990/6/17-1216.
The STS draws attention to the fact that payable financial assistance is a loan agreement as of its civil nature and in accordance with subparagraph 6.1. paragraph 1 of article 4 of the Law of Ukraine “On financial services and state regulation of financial services market” date July 12, 2001 N 2664 (hereinafter – the Law) is a financial service. According to article 5 of the Law, financial services are provided by financial institutions and, in cases when it is directly prescribed in legislation, by individual entrepreneurs.
According to article 1 of the Law, financial loans are the funds that are being provided in loan to legal entities or individuals for a certain period of time and at interest.
Thus, only financial institutions may provide funds in loan at interest.