Our company did not include thetax invoice in the VAT return for December 2014, having understated the VAT liabilities payable to the budget. How to correct this mistake?
In case of a mistake in the Tax declaration for value added tax, which form was approved by the Order of the Ministry of Finance of Ukraine of 23.09.2014, № 966 (as amended by the Order of the Ministry of Finance of Ukraine of 23.01.2015, № 13) (hereinafter - the VAT declaration), which was submitted in previous reporting periods, the VAT payer should correct this mistake (see Art. 50 of the Tax Code of Ukraine of 02.12.2010, № 2755-VІ (hereinafter - TCU) and para.2 of Sec. I of the Procedure of Completion and Presentation of the value added tax return approved by the Order of the Ministry of Finance of Ukraine of 23.09.2014, № 966 (as amended by the Order of the Ministry of Finance of Ukraine of 23.01.2015, № 13) (hereinafter – the Procedure № 966).
This correction should be made by sending to the tax agency as a separate document of the adjusted calculation (hereinafter – AC) to the tax return, where the mistake was found, in the form of the current AC at the date of its submission (p. 50.1 of the TCU).
In this case, the VAT payer should pay the amount of underpayment of tax liabilities and the fine of 3% of the underpayment amount. The following amounts should be transferred in the budget before the AC submission.
In addition, the payer also should accrue and pay the penalty for the non-payment of tax liabilities to the budget. This penalty is accrued on the day of maturity of the tax liability accrued by the VAT payer. In case of understatement of tax liabilities, the penalty should be accrued on the amount of the underpayment and for the entire understatement period (including the period of administrative and / or judicial appeal) – sub-s 129.1.2 of the TCU. The penalty is to be accrued on the amount of understatement of tax liability at the rate of 120% of the NBU discount rate, effective on the day of understatement of tax liabilities (para 129.4 of the TCU).
The penalty accrual starts from the first business day following the last day of the deadline for payment of tax liabilities (para 2.1.1 of the Instructions on the procedure for accrual and repayment of the penalty for payments that are controlled by the State Tax Service, approved by the Order of the State Tax Administration of Ukraine (STAU) of 17.12.2010, № 953 (hereinafter - Instructions № 953).
Accrual of penalty ends (see para. 129.3 of the TCU):
- on the day of funds crediting on the appropriate account of the authority conducting the treasury services of the budget funds, and/or in other cases of repayment of the tax debt and/or money liabilities;
- on the day of performing of mutual settlements of unpaid mutual money liabilities of the relevant budget to such taxpayer;
- on the day of moratorium on satisfaction of creditors claims (when rendering of the corresponding court decision in the bankruptcy case or the relevant decision by the National Bank of Ukraine);
- when the decision-making on the cancellation or the writing off the tax debt amount (its part).
The correction of the detected mistakes in previous reporting periods generally should be made through the appropriate lines (depending on the mistake) in the columns 4, 5 and 6 of the AC tabular part.
Thus, in column 4 should be indicated the relevant figures of the declaration of the reporting period that are corrected. If the declaration for this reporting period was previously amended, in column 4 should be reflected the relevant figures of column 5 of the last AC, which was applied to the declaration of the reporting (tax) corrected period.
The corresponding figures taking into account the corrections should be reflected in the column 5 of AC.
But in column 6 should be reflected the amount of mistakes (absolute value). The difference between column 5 and 4 is shown here.
The correction should be made in lines 1.1, 6, 6.1, 9, 18 in the situation we consider. Also, do not forget to show an increase in tax liability payable to the budget in the lines 25, 25.1, and the amount of the self-fine in line 25.3 of AC. The penalty is not to be shown in the AC but still to be paid to the budget.
If mistakes made in previous reporting periods, are in the applications to the declaration, do not forget in this case that such mistakes should be also corrected in the applications. So, together with the AC, which is to be submitted as an independent document and also as a part of the VAT declaration, the relevant applications with the mistakes should be submitted.
