During the determination of tax liabilities and the tax credit, for the majority of VAT payers a keyevent is that one which has occurred earlier (receipt of funds or goods sending). There is the cash method of accounting along with this, but not all the VAT payers can apply it.
Who can apply this method and what are the peculiarities of filling in the tax reporting on VAT when it is applied?
It should be recalled that the date of the tax liability and the tax credit are determined under the cash method by the payers of value added tax (hereinafter − VAT), which according to para.187.10 of the Tax Code of Ukraine (hereinafter – TCU):
- supply heat energy, natural gas (except liquefied), including provide services of its transportation and supply;
- provide services of water supply, wastewater disposal or the cost of which is included in the apartment rent or payment for housing maintenance.
The buyers of these goods and services are individuals, budgetary institutions − non-payers of VAT, and also public utilities service provider, apartment management units, condominium associations, other VAT payers who collect money from buyers mentioned above for the purpose of their subsequent transfer to sellers of such products (service providers) in compensation of their value.
This rule of determination of the date of tax liabilities also applies to the supply transactions of these goods and services for public utilities service providers and budget institutions that receive such goods or services, if they are registered as VAT payers.
The cash method is also used in case of supply of goods or services with payment for the budget funds. The date of tax liabilities in such cases is the date of crediting of these funds to the bank account of the VAT payer or the date of receipt of the compensation in any other form, including the reduction of the debt of such a VAT payer for his/her obligations to the budget (para. 187.7 of TCU).
The business entities can apply cash method of tax accounting of VAT for transactions in execution of contract construction works (para.187.1 of TCU).
Also the cash method is used by the companies of energy sector. However, currently this method applies to transactions on which the date of occurrence of the first event falls on the periods of January 2016 - June 2017 (para.44 of sub-sec.2 of sec. XX of TCU).
The payers, who use the cash method for VAT accounting, should fill in and submit the tax reporting on VAT in the manner established by the order of the Ministry of Finance of Ukraine of 28.01.2016, № 21. In addition to the general rules provided for all VAT payers, this procedure establishes specific peculiarities of filling in the reporting by such taxpayers, who use this cash method in accordance with para.187.10 of TCU, namely:
- in column 4 of Table 2 of Annex 5 they put down a mark “+”;
- in columns 5−7 of line “under tax invoices prepared before 01.07.2015” of Table 2 of Annex 5 they reflect volumes and VAT amounts, indicated in the tax invoices prepared before 01.01.2015, under which the right to include such amounts in the tax credit occurs after 01.07.2015 due to the use of this method of tax accounting;
- in Table 3 of Annex 5 they interpret VAT amounts included in the tax credit for the reporting period of July − December 2015 (III−IV quarters of 2015), on the basis of tax invoices prepared before 01.07.2015;
- in Table 4 of Annex 7 they distribute VAT amounts accrued (paid) in connection with obtaining of goods or services, during the supply of which it is applied both the cash method and the general rules for determining of tax liabilities and tax credit.
It is indicated in the letter of the State Fiscal Service of Ukraine of 17.03.2016, № 5887/6/99-99-19-03-02-15, Table 4 of Annex 7 to the VAT declaration should be filled in by not only the VAT payers who use the cash method determined by para.187.10 of TCU, but also by those who use this method in accordance with other norms of TCU.
