Code of UCC FEA (Ukrainian commodity classification for foreign economic activities) is not a new obligatory detail of a tax invoice. However, this detail was changed from January 1, 2017. Services together with the goods are the subject to encoding now. Let’s look into introduced innovations.
How should be the code of UCC FEA indicated now?
Amendments made to the Tax Code of Ukraine (hereinafter − TCU) by the Law of Ukraine “On Amendments to the Tax Code of Ukraine concerning the improvement of the investment climate in Ukraine” of 21.12.2016, № 1797-VIII (hereinafter − Law № 1797), made changes to sub-para. “i” of para. 201.1 of TCU. From 01.01.2017 the code of service was added to the code of goods, according to UCC FEA. Now payers of value added tax (hereinafter − VAT), except in the case of delivery of excisable goods and goods imported into the customs territory of Ukraine, have the right to specify the code of goods according to UCC FEA or service code according to the Classification not completely, but not less than first four digits of the corresponding code.
Thus, as before 01.01.2017, the UCC FEA code should be indicated by the VAT payers in column 3 of the tax invoice (hereinafter − TI) completely regarding excisable goods and goods imported into the customs territory of Ukraine. This code, as before, should be fixed at all stages of the supply of such goods.
As for the other goods supplied from 01.01.2017, the UCC FEA code could be indicated at the level of four digits or more. The service code may also include four or more digits.
How should be the code of UCC FEA chosen?
It should be reminded that UCC FEA is the commodity nomenclature of the Customs Tariff of Ukraine approved by the Law of Ukraine “On Customs Tariff of Ukraine” of 19.09.2013, № 584-VII (hereinafter − Law № 584). As indicated in the Procedure for Ukrainian commodity classification for foreign economic activity, approved by the Resolution of the Cabinet Ministers of Ukraine of 21.05.2012, № 428, it is applied for the purpose of tariff regulation and other types of regulation of foreign economic activities, conducting of foreign trade statistics and customs clearance of goods.
Therefore, a logical question arises: is it correct to apply UCC FEA when determining the code in the case of delivery of goods, which were not brought into the customs territory of Ukraine? The answer is simple.
UCC FEA is based on the Harmonized System of Commodity Description and Coding (hereinafter − HS) and the Combined Nomenclature of the European Union (hereinafter − CN).
According to the International Convention on the Harmonized System of Commodity Description and Coding of 14.06.1983, one of the parties of which is Ukraine (hereinafter − Convention):
- HS is the nomenclature that includes commodity items, sub-items and numeral codes related to them, the notes to the sections, groups and sub-items, as well as the basic rules of classification for the interpretation of HS listed in the Annex to this Convention;
- nomenclature of customs tariffs is the nomenclature developed in accordance with the legislation of the Contracting Parties to the Convention for the levying of duties on import of goods.
HS is one of the documents which to be used when the implementation of the international exchange of goods, as well as for the most basic classifications built on its base, i.e. national commodity nomenclatures.
Therefore, HS is the international base of national commodity nomenclature of the Customs Tariff of Ukraine − UCC FEA.
Basic rules for the interpretation of UCC FEA (hereinafter − Basic rules) are listed in the annex to the Law № 584. Explanations to the Ukrainian Commodity Classification for Foreign Economic Activities provide a significant assistance in classification of goods (determining UCC FEA code) (Annex to the Order of the State Fiscal Service of Ukraine of 09.06.2015, № 401; hereinafter − Explanation to UCC FEA).
Goods in UCC FEA are systematized with the divisions, groups, commodity items and sub-items, names and numerical codes which are unified with HS. The seventh and eighth signs of digital code corresponding to CN are used for the detailed commodity classification.
Incidentally, the Convention gives a contractual right to each party to make detailing of the goods at the national level (ninth and tenth signs of commodity code).
In due time, the customs officers in the letter of the State Customs Service of Ukraine of 15.10.2010, № 11/7-10.16/12169 noted that HS was a multipurpose commodity nomenclature (classifier), which met the needs of the statistical services, customs authorities and business activities. Therefore, the application of UCC FEA is not limited by the customs requirements, and therefore the demand for the indication of the UCC FEA code is logical. In fact, the National Classification for Products and Services (DK 016: 2010), approved by the Order of the State Committee for Technical Regulation and Consumer Policy of Ukraine of 11.10.2010, № 457, is associated with UCC FEA from the point of view of classification of products. Therefore, the commodity code should be indicated in TI according to UCC FEA (ZIR, category 101.17).
To be continued.
