25.09.08

Companies planning to switch from standard taxation to simplified taxation will not be able to deduct the cost of goods paid for while on standard taxation but sold under simplified taxation. Proceeds from sales of these goods will still be considered taxable income. This is according to Letter of the Ministry of Finance # 03-11-02/93 from August 20, 2008.

However, some challenge this opinion. MinFin specialists refer to Article 346.25, which does not say anything about how to report the price of goods paid for but not sold under standard taxation system. However, paragraph 2.1 of the mentioned article prescribes rules for reporting the depreciated book value of fixed assets and intangible assets in the process of transition from standard taxation onto simplified taxation.

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Source: “Documents and Commentaries”