Good news for payers of value added tax (hereinafter − VAT) is the fact that now the tax authorities do not require any other additional confirmationof the right to the tax credit. Tax invoice or adjustment calculation registered in the Unified Register of tax invoices (hereinafter − URTI) are the sufficient grounds for the buyer of goods (services) to include the amount of VAT to the tax credit. However, this requirement applies to tax invoices prepared and registered in URTI after 01.07.2017. Now, detailed information about changes in the following.
UCC FEA (Ukrainian Commodity Classification for Foreign Economic Activity) code - for all commodities
Commodity code according to UCC FEA is mandatory requisite of tax invoice (hereinafter – TI). It was indicated in column 3 of TI only in case of supply of excise and imported goods (sub-para. “i” of para.201.1 of the Tax Code of Ukraine, hereinafter − TCU). Starting from 01.01.2017 commodity code according to UCC FEA should be indicated for any and all commodities, and in case of supply of services − service code according to the State classification of goods and services (hereinafter − SCGS).
Today SCGS SC 016:2010 is in effect. Therefore, it is necessary to use the code to determine appropriate code of services or works. Services code as well as commodity code according to UCC FEA should be indicated in continuous order without any punctuation (spaces, dots etc.). Taxpayers, who supply domestic non-excise goods, have the right to indicate goods or services code incompletely but not less than the first four numerals. For example, in case of the plaster works on the construction object it is sufficient to indicate code 4331.
Commodity code according to UCC FEA is the only one mandatory requisite, where it’s better not to make mistakes in order to avoid penalties. However, by the end of 2017 moratorium is in effect on their application for made mistakes in TI when the indication of code of goods and/or services (para.35-1 of sub-sec. XX of TCU).
Deadline for registration of tax invoices
Deadlines for registration of TI and adjustment calculations in URTI are extended, namely:
- TI and adjustment calculations made from 1st to 15th calendar days of the month (inclusively) are the subject to registration in URTI before the expiry of the last day (inclusively) of the month when they to be made;
- Tax invoices and adjustment calculations made from 16th to the last calendar day (inclusively) of calendar month – to 15th calendar day (inclusively) of the month following the month when they to be made.
In other words the minimum term of registration remained 15 calendar days, but the maximum was doubled. For example, TI made 01.01.2017 and 15.01.2017 could be registered in URTI without penalties on 31.01.2017. Tax invoice made 16.01.2017 could be registered in URTI on 15.02.2017. However, the VAT amounts under these tax invoices should be reflected by the buyer in the tax credit in VAT declaration for January.
Suspension of registration of tax invoice
Starting from 01.04.2017 it is introduced the mechanism of suspension of registration of tax invoices and adjustment calculations in URTI. However, period from 04.01.2017 to 07.01.2017 is transitional, during which the registration should not be suspended. Since 01.07.2017 the procedure determined by para.201.16 of TCU will be in force. For this purpose, there will be constant automated monitoring in URTI of meeting the requirements of TI and adjustment calculations to risk evaluation sufficient to suspend their registration. These criteria should be defined by the Ministry of Finance, and the procedure of registration suspension – the Cabinet.
Suspension of such registration should be confirmed by the receipt, which is received by the VAT payer from the controlling authority in electronic form in text format during the operating day.
Payments to the budget
Since the implementation of the system of electronic administration (hereinafter − SEA) of VAT on a regular basis, the payments to the budget should be carried out from electronic VAT accounts of the payers of this tax. Thus, from 01.07.2015 the source of self-payment of VAT liabilities is the amounts of money, which counted on the account of the payer in SEA of VAT. Accordingly, in order to repay the VAT liabilities that arose before 01.07.2015, the taxpayer transfers money to the budget from the current bank account.
Amendments made to the paragraph 87.1 of TCU give reasons to claim that tax liabilities declared not only in VAT declarations but in adjustment calculations should be paid from the electronic VAT-account. The controlling authorities will establish separate registers in order to transfer the VAT amounts declared in adjustment calculations to the budget.
VAT refund under unified register
There were in force two registers of applications for sums return of VAT refund last year: the first − for taxpayers who meet the criteria defined by paragraph 200.19 of TCU; the second - for taxpayers who do not meet the established criteria.
In 2017 the eligibility criteria were cancelled. The State Fiscal Service of Ukraine (hereinafter – SFSU) should before 10.01.2017 form the unified register of applications for refund of budgetary compensation in chronological order of their receipt on the basis of two registers of applications. Now VAT refund should be carried out by the authorities of the Treasury on the basis of the register of applications for refund of budgetary compensation specified without conclusions of the controlling authorities. However, para.55 of sub-sec. 2 of sec. XX of TCU determines limitations under which the VAT refund should be carried out within the funds available in the unified treasury account.
In addition, before 01.02.2017 the SGSU should establish a separate temporary register of applications for refund of budgetary compensation submitted before 01.02.2016 (before the introduction of two registers) and under which VAT amounts are not compensated from the budget as of 01.01.2017. VAT amounts specified in the register should be compensated chronologically in order of receipt of applications for the return of amounts of budgetary compensation of VAT within the sums determined by the State Budget of Ukraine for appropriate year.
The Cabinet will administrate the amounts of budgetary compensation of VAT between new registers.
Overpaid tax liabilities on VAT
The amounts of overpaid money obligations on VAT are to be returned exclusively on account of the taxpayer in SEA of VAT (para. 2001.4 of TCU). Such amounts should be transferred on the current account of the payer in a banking institution only in case of absence of such an account in SEA of VAT at the date of application of the taxpayer with the application on the return of overpaid tax liabilities of the tax or at the time of the actual refund of such funds (para. 43.4-1 of TCU).
At the same time, on 20.01.2017 the registration limit value (Σ Invoice) should increase by the amount repaid to the VAT payer on his/her account in SEA of VAT in the period from 01.01.2016 to 01.01.2017. Within the amount of this increase, the taxpayer has the right to apply and transfer funds from his/her account in SEA of VAT on his/her current bank account (para.53 of sub-sec. 2 of sec. XX of TCU).
Use of VAT balance in case of reorganization
Transactions for reorganization of legal entities are not the subject to VAT, and the person formed as a result of this reorganization should be registered by the VAT payer as any other newly created entity.
New paragraph 198.7 of TCU enables the controlling authority after the documentary verification to transfer the balance of negative values (line 21 of VAT declaration of payer that reorganized) to the tax credit of legal successor.
In addition, the balance of the registration limit (Σ Invoice) of the payer reorganized by joining, merger, transformation or division, should be used in the calculation of Σ Invoice of legal successor of such payer (para. 2001.3 of TCU).
Registration of tax invoice in case of insufficiency of Σ Invoice
According to the general rules established by paragraph 2001.3 of TCU, registration of TI is possible only if there is sufficient amount of the registration limit of (ΣInvoice). But new paragraph 2001.9 of TCU in the event of insufficient registration limit allows doing this at the expense of one of the indicators of the formula − ΣExcess. In this case the VAT payer has the right to register TI in URTI in the amount of VAT, which is equal to the rate of ΣExcess, decreased by the amount of declared tax liabilities for periods starting from 01.07.2015 and increased by value of the indicator of ∑PrevAcc.
We have considered not the whole list of changes, but showed the most important ones.
