As it is known, the amount of negative value of value added tax (hereinafter −VAT), actually paid to suppliers of goods and services, but no more than the amount of the registration limit, is subject to budgetary compensation.However, it may happen that at the date of receipt by the tax authority of a declaration with a negative value of VAT, the registration limit is either absent or also with a minus. Is it possible to compensate the VAT in such a case?
Taking into account the requirements of the tax legislation, the VAT payer is then deprived of the right to declare a budgetary compensation. Negative value of VAT will be included in the tax credit of the next reporting period (the value of line 21 of the declaration for the reporting month is transferred to line 16.1 of the declaration for the next month). That is, the negative value of VAT will not disappear anywhere and will be used by the payer, but differently than the budgetary compensation. As a result of the declaration for the next month, the amount of tax liability will be decreased on this amount (which to be reflected in line 18 of the Declaration). This is possible when there is a positive value of the difference between the amount of the tax liability and the amount of the tax credit (line 9 - line 17 > 0).
In general, if the registration limit with a “-” sign, the VAT payer will not be able to declare a budgetary compensation.
However, the situation may recur, and in the next reporting period the negative value of VAT will be declared again, and again the registration limit will be with a minus. What should a payer do in this situation? Let’s consider some possible options for actions.
Option 1. It is possible to take a passive position. In this case, there is nothing else than to re-credit the negative value of VAT in the composition of the tax credit for the next reporting period. And if the registration limit continues to be with the “-” sign in the future, the negative value of VAT will “travel” from the declaration to the declaration until it to be overridden by the positive value of the difference between the amounts of the tax liability and the tax credit.
Option 2. It is possible to take the advice of tax authorities, which usually comes to the fact that the payer “lost” this amount (it means not to reflect in the declaration). But it is worth remembering that the lost can not be returned.
Option 3. To solve the problem, it is necessary to increase the registration limit on the date of submission of the declaration within the amount to compensate for the missing. Considering the algorithm for calculating the registration limit (paragraph 2001.3 of the Tax Code of Ukraine), it can be done through:
- received tax invoices and adjustment calculations registered in the URTI;
- VAT payment at customs (when import transactions are performed);
- replenishment of VAT accounts in the system of electronic VAT administration.
If the VAT payer is not an importer, then he/she can count on the input tax invoices and on his/her own funds. It is for own funds, which the VAT payer should transfer from the current bank account to the electronic VAT account. If these funds are not available, they can be borrowed by issuing as reimbursable financial assistance.
At first glance, the advice may seem meaningless. However, this is a real chance to regain budgetary compensation to a bank account, and then in the next reporting period it will be possible to return the funds transferred by the payer to the electronic VAT account to increase the registration limit. It is possible to claim the return of excess funds from the electronic VAT account to the current account of the payer in the bank through filling in the table 2 of Appendix 4 to the VAT declaration.
