The sanctions for the failure to register of tax invoices in URTI

Section II of the Tax Code of Ukraine (hereinafter - TCU) of 02.12.2010, № 2755-VІof 01.01.2015 was amended by adding a new article – 120¹.It provides for sanctions for failure to register on time of the Tax Invoices (hereinafter – TI), which should be provided to the buyers - VAT payers, and the Adjustment Calculations (hereinafter –AC) to such TI in the Unified Register of Tax Invoices (hereinafter –URTI).

Today the period of the registration of TI or the adjustment calculations to TI in URTI is 15 calendar days following the day of TI preparation (sec. 201.10 of TCU).

According to sec.120¹.1 to the VAT payer for the failure to register on time of the TI or AC the following sanctions could be applied in the amount of:

• 10% of the VAT amount indicated in TI or AC, - in case of failure to register period to 15 days from the deadline date of TI or AC registration in URTI;
• 20% of the VAT amount in TI or AC, if the failure to register period is from 16 to 30 days from the deadline date of TI or AC registration in URTI;
• 30% of the VAT amount, in case of failure to register period from 31 to 60 days;
• 40% of the VAT amount, in case of delay in TI or AC registration in URTI, is 61 or more calendar days.

As to sanction of 40%, it actually would be applied only in case of failure to register period from 61 to 164 days. This is because the penalty of 50% of the VAT amount is provided for by the sec.120^1.2 of TCU, if there is no any information about TI in URTI during 180 days from the TI preparation date. The period of 180 days from the TI preparation date is calculated in the indicated sec. So the fact is that the sanction of 50% would be applied if the failure to register of TI or AC is 164 calendar days from the deadline date of TI or AC registration in URTI.

We would like to emphasize that the mentioned above sanctions should be applied provided that such TI or AC to them are the subject to be provided to the buyers – value added tax payers (see the SFSU letter of 19.01.2015, № 1403/7/99-99-19-03-01-17).

In addition, sec.35 of subsection 2 of p. XX of the TCU provided for that the norms of paragraph 2 of sec.120¹.1 of the TCU (penalty in the amount of 10% of the VAT amount - see above) were not applied in case of failure to register period in URTI of TI/AC prepared during the period from 1 February 2015 to 1 July 2015.

The controllers explained in the SFSU letter of 19.01.2015, № 1403/7/99-99-19-03-01-17  that the mentioned sanction (penalty in the amount of 10%) should not be applied from 1 January to 30 June 2015. The controllers clarified this by the reason that from 1 January to 1 February 2015, not all the TI/AC were the subject to the compulsory registration in URTI, and also they took into account the additions of sub-s. 4.1.1 of the TCU.

As it follows from the Art.120¹ of the TCU, the sanctions depend on the VAT amount in TI/AC, and therefore the delay /failure to register of TI/AC in URTI in case of delivery of VAT-exempt transaction or that one, which is taxable at the rate of 0%, would not be the subject to the sanctions for the VAT payer.