“Substitutes” of tax invoice, which give the right to form tax credit

The procedure for forming a tax credit is regulated by Art. 198 of the Tax Code of Ukraine (hereinafter – the Tax Code). In general case, the amount of value added tax (hereinafter – VAT) on transactions in the customs territory of Ukraine is classified as a tax credit under the rule of “first event”. The main condition for the recognition of a tax credit is the presence of properly executed supporting documents. In which cases it is allowed to form a tax credit without receiving a tax invoice – further.

Documents confirming the right of a VAT payer to a tax credit

The documents that confirm the right of a VAT payer to a tax credit include are as follows:

• tax invoices and adjustment calculations to them, registered in the Unified Register of Tax Invoices;
• customs declarations for the import of goods;
• other documents provided for in item 201.11 of the Tax Code (in particular, cash receipts, transport tickets, invoices for communication services).

“Substitutes” of the tax invoice

In some cases, the tax credit is allowed to form without receiving a tax invoice on the basis of documents listed in item 201.11 of the Tax Code (cash receipts, transport tickets, hotel bills or bills for communication services or other services, the value of which is determined by accounting devices).

In the case of using in VAT accounting “substitutes” of tax invoice, one should take into account that:

• rule “1095 working days” does not apply to them. This means: if during the period of the right to a tax credit the amount of VAT was not included in the tax credit on the basis of a “substitute” document, then this can be done only through a clarifying calculation to the declaration;
• “substitutes” of the tax invoice are not registered in the URTI, therefore (unlike tax invoices) the amounts of the tax credit on cashier’s checks, transport tickets, invoices for payment of services, etc. will not increase the registration limit of the buyer.

In addition, the design of these documents must meet the requirements set out in item 201.11 of the Tax Code (Table).

Table. Main details of the “substitutes” of the tax invoice

Examples 1 and 2 will show the conditions under which the VAT payer will be able to use such documents.

Example 1. The use of “substitutes” of tax invoice for the sale of goods

On September 29, 2021, an employee of the enterprise purchased stationery in the store for cash in the total amount of 540 UAH (including VAT – 90 UAH). The employee bought goods in two different departments and received two fiscal checks: one – in the amount of 330 UAH (including VAT - 55 UAH), and another – in the amount of 210 UAH (including VAT – 35 UAH). The advance report was submitted to the company’s accounting department on October 1, 2021.

According to paragraph “b” of item 201.11 of the Tax Code, the total amount of goods or services received per day must not exceed 200 UAH (excluding VAT). That is, the VAT payer has the right to include in one day to the tax credit the amount of VAT in the amount not exceeding 40 UAH (200 UAH × 20%) for all cash payments per day on the basis of duly executed cash receipts. Accordingly, if the amount in the check exceeds 240 UAH (including VAT), the payer has no right to attribute this amount (or even part of it) to the tax credit.

In this situation, the first check in the amount of UAH 330 including VAT (>240 UAH) does not give the right to include in the tax credit the amount of VAT specified in it in the amount of 55 UAH. If the store does not issue a tax invoice for this purchase, the company has the right to include the amount of VAT in expenses.

In this case, the company will be able to include only the amount of VAT on the second check in the amount of 35 UAH to the tax credit. Moreover, the tax credit should be formed not on the date of the check, but on the date of submission of the advance report – October 1, as the documents confirming the expenses incurred by the accountable person are submitted together with the report (category 101.13 “ZIR”).

The amount of VAT on the second cash receipt (35 UAH) the company will include in line 10.1 of the VAT return for October and in table 2.1 of Annex D1 to the return.

Example 2. The use of “substitutes” of tax invoice for utility transactions

The company received an invoice dated September 15, 2021 for water supply and sewerage services and paid it on September 17, 2021.

Tax credit without receiving a tax invoice can be formed on the basis of the invoice, but under the following conditions (paragraph “a” of item 201.11 of the Tax Code):

• services are provided;
• cost of services is determined by the accounting devices;
• invoice contains the total amount of payment, the amount of tax and the tax number of the seller (supplier) of such services.

The conditions are met in this case. The date of formation of the tax credit is determined by the enterprise by the “first event’: either by the date of the invoice, or by the date of transfer of funds from the bank account of the enterprise to pay for such services.

Since the invoice is the first event and the payment is the second, the company has the right to include in the tax credit in the tax return for September the amount of VAT on the basis of the invoice.

Often in such cases, companies receive both an invoice and a tax invoice. Usually the invoice comes earlier, and later (early next month) the company receives a tax invoice from the utility. How to act in this case? Note that the fact of forming a tax credit for services, the value of which is determined by the accounting devices, on the basis of the invoice issued by the provider of such services does not release such supplier from the obligation to register in URTI tax invoice drawn up for the supply of such services (item 201.10 of the Tax Code). At the same time, after registration of such TI in URTI, the recipient of services does not include the amount of VAT specified in it in the tax credit, because the tax credit for the supply (receipt) of such services has already been formed on the basis of the invoice issued by the service provider.