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Ukraine to Citizens – No Taxes Due on Captured Russian Tanks

Interesting article from CPA Practice Advisor on Ukraine Tax Authority’s position to pass on captured spoils of war.

Spoils of War? Ukraine Says No Taxes Due on Captured Russian Tanks

Isaac M. O’Bannon – March 3, 2022, CPA Practice Advisor
“Have you captured a Russian tank or armored personnel carrier and are worried about how to declare it? Keep calm and continue to defend the Motherland! There is no need to declare the captured Russian tanks and other equipment, because the cost of …”

Ukraine’s national tax agency has stated that its nation’s citizens do not have to declare receipt or pay taxes on captured Russian tanks.

As the country continues to be under siege by the Russian, many media reports have noted incidents of Russian military vehicles and weapons, including tanks, being abandoned after encountering mechanical troubles or running out of fuel. Some Ukrainians have taken this as an opportunity to “joyride” in the tanks, but Snopes says no, they aren’t really trying to sell them on eBay.

So, what’s a law-abiding, tax-paying Ukrainian to do? Well, I’m no expert on Ukrainian tax law (or U.S. tax law for that matter), but if the IRS were involved, they would likely want a piece of the action – like being taxed on prize winnings.

Ukraine’s National Agency for the Protection against Corruption (https://nazk.gov.ua/en/), however, has a different opinion:

“Have you captured a Russian tank or armored personnel carrier and are worried about how to declare it? Keep calm and continue to defend the Motherland! There is no need to declare the captured Russian tanks and other equipment, because the cost of this … does not exceed 100 living wages (UAH 248,100),” NAPC’s press service said.

“Speaking by the letter of the law, combat trophies are not subject to reflection in the declaration for the following reasons: they were acquired not as a result of the conclusion of any type of transaction, but in connection with the full-scale aggression of the Russian Federation on February 24, 2022 against the independent and sovereign Ukrainian state as a continuation the insidious attack of the Russian Federation on Ukraine launched in 2014. Thanks to the courage and victory of the defenders of the Ukrainian state, enemy military equipment usually comes to you already destroyed and disabled, which makes it impossible to evaluate it in accordance with the law On the valuation of property, property rights and professional valuation activities in Ukraine. Therefore, it is also impossible to find out how much such property costs,” the NACP said.

Note to Americans taxpayers: If you find an abandoned tank, please inform your tax professional so that you can stay in compliance with applicable U.S. tax laws. 😉