Black Sea Fleet won Ukrainian taxmen

01.10.2010 Black Sea Fleet (BSF) 13th Ship-Repair Plant located in Sevastopol and belonging to Russian Defense Ministry has juridically vindicated its right not to pay VAT.

Sevastopol taxmen had been charging the BSF plant with violation of value-added tax law and non-payment of UAH 11.5 mln VAT. They tried to recover this debt from the plant and rendered a bill for UAH 23 mln including fines, writes Delo.

Representatives of the BSF ship-repair plant appealed to a court having declared that repair of ships had been conducted within the Russian Naval Base which is the territory of the Russian Federation, although located in Ukrainian waters. In this connection, the plant is under no obligation to pay value-added tax, said the application.

The court affirmed that warships of the foreign state (Russia) are neither the part of Ukrainian territory nor its customs area, maintaining the status of the flag state. Therefore, claims of Ukrainian taxmen to Russian Black Sea Fleet are groundless. Consequently, in Sept 2010 the Sevastopol County Administrative Court gave judgment in favor of 13th Ship-Repair Plant and canceled the decision of Sevastopol tax office.

It was reported the day before yesterday that Russia transferred only a half of the sum meant for socioeconomic development of Sevastopol. This tranche came with a 6-month delay, said Sergei Zhivoduyev, deputy mayor of Sevastopol.