FINANCING OF HOUSING THROUGH REAL ESTATE FUNDS: THE RELATIONSHIP BETWEEN LEGAL, TAX AND ACCOUNTING ASPECTS Abstract. The article examines the processes of housing construction financing through the mechanism of creating funds for real estate transactions from the standpoint of legal and scientific- theoretical justification. The interrelation of legal, tax, and accounting aspects in the process of housing financing through real estate funds and the impact of the issuance of property certificates as equity instruments on the activities of managers of real estate funds are determined. In the context of providing the housing with financial resources, the dynamics of the index of capital investment in housing construction and the commissioned area of residential real estate as indicators of housing development are analyzed in recent years in Ukraine. It is determined that the current Ukrainian legislation provides five mechanisms of financing of housing construction: construction

ISSN 2306-4994 (print); ISSN 2310-8770 (online) UDC 338.45:657.1 Karyy O. Doctor of Economics, Professor, Department of Management of Organizations, Lviv Polytechnic National University, Ukraine; e-mail: oleh.i.karyi@lpnu.ua; ORCID ID: 0000-0002-1305-3043 Grytsay O. Ph. D. in Economics, Associate Professor, Department of Accounting and Analysis, Lviv Polytechnic National University, Ukraine; e-mail: olga.i.grytsay@lpnu.ua; ORCID ID: 0000-0001-6305-9219 Sorokovyi P. Postgraduate student Departments of Accounting and Analysis, Lviv Polytechnic National University, Ukraine; e-mail: pavlo.m.sorokovyi@lpnu.ua; ORCID ID: 0000-0002-7971-9899 Khomuliak T. Ph. D. in Economics, Associate Professor, Associate Professor of the Department of Accounting Technologies and Taxation, Banking University, Ukraine; -mail: taryh77@gmail.com; ORCID ID:0000-0002-6648-6782

. attracting financial resources. In this context, the availability of sufficient sources of financing for housing construction is perhaps the most important condition for the development of the housing market in Ukraine. An indicator that characterizes the dynamics of the development of housing construction in Ukraine is the index of capital investment in housing, which, according to the State Statistics Service of Ukraine [15], during 2012-2019 has a slight downward trend (Fig. 1).

Fig.1.Relationship between the index of capital investment in housing construction and commissioned area of residential real estate
Source:built by the authors based on [15].
The resulting indicator of investments in housing construction is the commissioned area of residential real estate, which in recent years has shown fairly stable dynamics with some decrease in 2016 and 2018 (see Fig. 1).
Analyzing the sources of financing of housing construction in Ukraine [15] it is established that the main source of financing of housing construction is the funds of the population, as well as enterprises, institutions, and organizations.The authors also surveyed developers in Lviv, Ternopil, Ivano-Frankivsk, Volyn, and Zhytomyr regions. The author's analysis of housing financing allowed identification and combining real non-standard problems faced by investors and developers during the organization, accounting, and analysis of housing financing.
Although the legislation [16] stipulates that at least five financing mechanisms can be used in housing construction: CFF, HC, real estate funds (REF), mutual investment institutions, issuance of interest-free (target) bonds. Each of the construction financing mechanisms has its specifics, advantages, and risks, so it needs thorough disclosure. b) participation in the CFF for the subsequent acquisition of ownership of investment objects acquired in this way.
According to the law of Ukraine, the REF is the money received by the manager of the REF to manage, as well as real estate and other property, property rights, and income acquired by managing these funds, including such property and property rights or claims arising from agreements on participation in the CFF [15]. REF certificates belong to equity securities. According to [17], equity securities entitle their owner to receive a profit, the amount of which is not guaranteed. REF certificates (as well as investment certificates), in contrast to shares, do not confirm the ownership of corporate rights but indicate the right to receive income from investments in real estate in proportion to the number of certificates. After all, REF is only an accumulated mass of money and property. REF money and property cannot be considered as the authorized capital of the company.
From an organizational point of view, creating a REF is quite difficult. This can be done by a bank or non-bank financial institution. REF is not a separate legal entity, so it is not necessary to enter it in the state register of financial institutions.A non-bank financial institution must obtain a permit from the National Securities and Stock Market Commission (NSSMC) to issue REF certificates and organize its issuance of certificates (develop and approve the issue prospectus, investment declaration, register the issue and the issue prospectus with the NSSMC, etc.) [19].
REF When conducting accounting, managers (issuers of REF certificates) must be guided primarily by national regulations (standards) of accounting. Earlier, the State Commission for Regulation of Financial Services Markets of Ukraine approved Guidelines for the management of the construction financing fund and/or real estate fund accounting of their property and property under their management [20].
However, these Guidelines have expired, but no alternative normative document has yet been adopted.
Since, as noted above, REF certificates are equity securities and are economically similar to investment certificates, REF for the organization of accounting of its activities may take into account the provisions of the Regulations on accounting features of operations of collective investment institutions [21]. Therefore, for the accounting of transactions during the management of property received under control by a contract with legal entities and individuals, REF has to apply these recommendations, but only insofar as it does not contradict current legislation conducting accounting and reporting.
Taking into account the lack of guidelines for accounting for housing finance processes through REF, adhering to the current domestic legislation in the field of accounting, we proposed the content of typical business transactions related to the management of REF's property and correspondence accounts, which are presented in Table 1.  The property transferred to the management must be separated from the other property of the founder and the property of the manager. That is, the property transferred to the management should be accounted for by the manager in a separate balance sheet, and it should be kept separate. Settlements related to property management are made in a separate bank account.Analytical accounting of operations by the management of the property received in supervision, the manager carries out separately for each REF, for each object of construction, and the developer.
Depending on the construction financing mechanism, not only the list of taxes payable but also the tax burden may differ.
The manager of REF, who carries out activities following the Law [16] on operations and results of trust management activities carried out by him through the fund, is a payer of income tax. With this in mind, the manager of such REF keeps separate accounting of transactions and results of trust management activities carried out by such manager through the fund, separately prepares financial statements, and determines the pre-tax financial result. Such financial result adjusted with the tax differences is the object to corporate income tax under the provisions of the Tax Code of Ukraine (TCU) [22] in the general order.
According to the TCU [22, subparagraph 180.1] for tax purposes, the payer of value-added tax (VAT) is a person -property manager, who maintains a separate tax accounting for VAT on business transactions related to the use of property received under the management of property management agreements. It is also stated that «… for tax purposes, economic relations between the manager of property for his economic activity and his property management activities are equated to relations based on separate civil contracts. The provisions of this subparagraph of the TCU do not apply to property managers who manage the assets of mutual investment institutions, banking management funds, construction financing funds and real estate funds established following the law». The supervisory authorities interpret this rule as the fact that REF managers are relieved of the obligation to register as individual VAT payers under each property management agreement (similar to the registration of a joint venture agreement). However, real estate funds are VAT payers.
The transactions of an issue (emission), investment in all forms of management and sale (redemption, repurchase) at the expense of the securities issued in circulation by business entities, including the certificates of real estate funds are not an object to VAT [22, 196.1].
The manager of REF receives the real estate in trust management and the property right (though by the principal) is also registered on him. In this case, the real estate is not transferred to the owners of REF certificates in any way.
Income transactions of REF (for example, rent) for VAT purposes are equated to ordinary transactions for the supply of goods (works, services). Therefore, the manager of REF is an ordinary landlord or seller of real estate by the rules of the TCU and his transactions are subject to VAT in the general order.
As for the sale of housing on the secondary market, this transaction is exempt from taxation. Regardless of the method of financing the construction, following [22, 197.1.14], the transactions for the supply of residential facilities, except for their first supply -transfer of new housing to the ownership of the buyer; construction of housing at the expense of the customer (including from materials purchased at the expense of the contractor); the first sale to the buyer of reconstructed or overhauled housing, if such buyer is not the owner at the time of decommissioning of this housing; provision of services for reconstruction or overhaul (including materials purchased at the expense of the contractor) are not subject to VAT Regarding liability and risk reduction within the funding mechanism through the REF, it should be noted that the original version of the Law [16] provided several types of compulsory insurance. In particular, in different editions, there were such types of compulsory insurance as: -insurance of construction and installation works for the entire duration of the construction object and the warranty period from the risks of its damage or destruction (in favor of the manager as a trustee); -liability insurance to third parties -the founders of the fund during construction and installation work from the risks of violation of construction deadlines and causing moral and material damage to third parties due to poor performance of construction and installation work (in favor of the founders of the fund). In essence, it was close to the obligatory insurance of construction works by the customer/contractor; -insurance of the manager's liability (at the expense of own money) for losses which can be caused to owners of REF certificates by actions or inaction of the manager.
However, the legislation [16] has been repeatedly revised to include (exclude) these types of insurance as the compulsory types of insurance. In the current version, all these types of insurance are removed as mandatory. Thus, insurance of property and other risks that accompany the investment and may arise in the process of functioning of the REF can be carried out as a voluntary type of insurance. Besides, the above law obliges to insure the real estate purchased by REF against the risks of death or damage, at its full cost (in favor of the manager as a trustee) at the expense of REF.
In the case of issuance of REF certificates, their placement is carried out among a predetermined number of persons, the number of unqualified investors among whom may not be equal to or exceed 150 persons, except in the case of a public offer by the issuer in the issuance process.
Qualified investors, according to the rules [18] are: 1) international financial organizations; 2) foreign states and their central banks; 3) the state of Ukraine represented by the state authorities empowered by it, the National Bank of Ukraine; 4) professional securities market participants, banks, and insurance companies; 5) legal entities, including those established under the legislation of another state, if they meet at least two of the following criteria: -the balance sheet total is at least 20 million Euros at the exchange rate of the National Bank of Ukraine as of the date of the last annual report; -the annual net income from the sale of goods, works, and services for the last financial year is not less than 40 million Euros at the rate of the National Bank of Ukraine as of the date of the last annual report; -own funds amount to at least 2 million Euros at the exchange rate of the National Bank of Ukraine as of the date of the last annual report.
Thus, the current legislation has sufficiently limited the number of REF investors.
The state regulation of housing construction and its financing determines not only the legal and financial relations between the participants in the construction (investors, developer, contractors) but also sets high demands on the control procedures for effective use of financial resources. These control procedures are based primarily on financial information, the main source of which is the accounting system.
Conclusions. Based on the above, we conclude that the current legislation provides certain opportunities for optimizing the tax burden in the construction industry, which contributes to the development of enterprises and their competitiveness. Concerning the use of REF to finance housing construction, there are no separate tax preferences for this mechanism, and due to the vagueness of the REF tax rules for investment, there are certain risks. Besides, given the clear legal limitations on REF investors, it becomes clear why the mechanism is not widely used in the realities of domestic financing of housing construction.
Based on the experience of countries with developed investment infrastructure, it seems appropriate to improve Ukrainian legislation by approving guidelines on the peculiarities of accounting by managers of real estate funds while considering their property and property under their management. Besides, it is necessary to make adjustments to the tax legislation, clarifying the interpretation of the Tax Code of Ukraine on VAT taxation of the activities of real estate funds.