The company exceeded the amount of taxable transactions in UAH 1 million and did not submit an application for registration as a value added tax payer (hereinafter – VAT) in time. Read below what consequences to expect and how to avoid fines from the controllers.
Consequences of late VAT registration
In accordance with item 181.1 of the Tax Code of Ukraine (hereinafter – the Tax Code), if the total amount from transactions for the supply of goods/services subject to taxation, in particular transactions for the supply of goods/services using a local or global computer network, is accrued (paid ) to such a person during the last 12 calendar months, in aggregate exceeds UAH 1 million, such a person, or in our case, an enterprise, is obliged to register as a VAT payer with the controlling body at its location (place of residence) in compliance with the requirements provided for in Art. 183 of the Tax Code, except for a person who is a single tax payer of the first – third groups.
According to item 183.1 of the Tax Code, any person who is subject to mandatory registration as a VAT payer must submit a registration application (hereinafter – the application) to the supervisory body at their location (place of residence).
In the case of mandatory registration of a person as a tax payer, the application is submitted to the supervisory authority no later than the 10th day of the calendar month following the month in which the amount of taxable transactions defined in Art. 181 of the Tax Code was reached first time.
If the last day of the deadline for submitting an application falls on a weekend, holiday or non-working day, the last day of the deadline is considered to be the next working day after the weekend, holiday or non-working day.
As a general rule, according to item 183.10 of the Tax Code, any person who is subject to mandatory registration as a VAT payer and in the cases and in the manner provided for in Art. 183 of the Tax Code, has not submitted a registration application to the controlling body, is responsible for non-charging or non-payment of VAT as a registered payer and does not have the right to charge a tax credit and receive a budget refund.
If the fact of non-registration as a VAT payer is discovered by the tax authority during the inspection, fines will be applied to such a business entity in accordance with item 123.1 of the Tax Code (10% of the amount of the VAT liability determined by the controlling authority or 25% in case of proof of willful violation).
Therefore, in order to avoid financial punishment, it is necessary to monitor the reporting deadlines and not to exceed financial thresholds.
