Considering the practical aspects of the application of UCC FEA code in the tax invoice, we focus on the issues of how many signs of the code should be indicated for excisable goods and how the service code should be identified.
How many signs of the code should be indicated for excisable goods?
Classification of goods according to UCC FEA should be carried out at the level of:
- group (two signs);
- commodity item (four sings);
- international harmonized system (commodity sub-items) (six sings);
- commodity category (eight signs);
- commodity sub-category (10 signs)
In particular, the operating procedure of department of customs duties, customs clearance divisions of the customs authority and the customs post in matters of classification of goods transported through the customs border of Ukraine, approved by the order of the Ministry of Finance dated 30.05.2012, № 650, provides that the commodity classification is the definition of the code of goods in accordance with the requirements of Basic rules, taking into account the Explanation to UCC FEA.
It is stated in the first one of the Basic rules that the titles of sections, groups and sub-groups are indicated only for convenience of UCC FEA use. With a legal purpose, the goods are classified in UCC FEA on the basis of commodity items (four sings) and related notes to the sections or groups. And if these names do not provide otherwise under the other basic rules.
The seventh, eighth, ninth and tenth signs of digital code are used in UCC FEA for the detailed commodity classification (para.3 of Art.67 of the Customs Code of Ukraine). And it seems that the commodity classification for legal purposes should not be identified with the classification for tax purposes. In addition, the code of the goods determined at the level of a commodity sub-category (10 sings) is the detailing of the UCC FEA code at the national level − for all goods without exception, including goods of Ukrainian production.
By the way, tax authorities also oriented precisely on the 10-digit code of excisable goods or imported into Ukraine (letter of SFSU of 20.01.2017, № 1312/7/99-99-15-03-02-17; ZIR, category 101.17).
Should the codes of excisable goods listed in para. 215.3 of TCU be indicated?
The fact is that the goods, listed in this paragraph, from which the excise tax to be paid, and not all of them have a full 10-digit UCC FEA code. And we have already determined that the full code of UCC FEA (the 10-digit code) should be entered in tax invoice (hereinafter − TI). In addition, sub-para.“i” of para. 201.1 of TCU mentioned UCG FEA for all commodities, that is, without any exception for excisable goods.
Thus, UCC FEA codes from paragraph 215.3 of the Tax Code of Ukraine (hereinafter – TCU) are to be applied for determining the excisable goods for the purpose of the excise tax imposition.
How should the service code be identified?
In order to do this, it is necessary to use DK 016:2010. It positioned the service as a result of a separate type of economic activity, according to the Classification of Economic Activities (DK 009:2010), approved by the Order of the State Committee for Technical Regulation and Consumer Policy of Ukraine dated 11.10.2010, № 457 (hereinafter − DK 009:2010).
DK 009:2010 slightly expands characteristic of the services. Namely:
- service is the result of economic activity, under which it is impossible to establish the right of ownership;
- services can not be sold separately from the process of their production;
- time of completion of the production of service coincides with the moment of its presentation to the consumer.
DK 009:2010 includes an explanation only of the term “service”, but also it contains the term “work”. In particular, section F “Facilities of construction and construction works”. However, for classification DK 009:2010, any result of economic activity for which it is impossible to establish property rights is still the service. In addition, for purposes of VAT taxation, the services delivery will be “...any transaction which is not the delivery of goods or other transaction for the transfer of the right to objects of intellectual property and other intangible assets or the provision of other property rights in respect of intellectual property rights, as well as the provision of services consumed in the course of committing certain acts or implementing certain activities” (sub-para. 14.1.185 of TCU). Therefore, it is necessary to indicate the code in TI according to DK 009:2010 in the case of the provision of services or performance of works.
As it was already mentioned, the number of signs of such code should not be less than four. There were not made amendments regarding the rules of code indication in TI in the procedure for filling of the tax invoice approved by order of the Ministry of Finance of 31.12.2015, № 1307. In addition, there is no corresponding column for the service code in it.
Therefore, the tax authorities reassured VAT payers − service providers: “...the service code should not be temporarily indicated before the making of appropriate amendments to the form of the tax invoice and the procedure for its filling when the preparation of the tax invoice” (letter of SFSU of 20.01.2017, № 1312/7/99-99-15-03-02-17). Until then, the absence of the service code is not to be considered as the mistake made when the preparation of TI.
In addition, the tax authorities focused on the fact that changes concerned TI prepared after 01.01.2017. And the commodity code should be specified at all stages of the delivery of goods from the producer or importer to the final consumer, regardless of the date of acquisition or manufacture of such goods, that is, before 01.01.2017 or after.
