The Old "New System" Of Electronic VAT Administration

The Law of Ukraine "On Amendments to the Tax Code of Ukraine As Regards Improvement of VAT Administration" came into legal force on 29 July 2015.

What shall change and which benefits will be granted to taxable persons.

For the sake of correcting errors the Draft Law provides that the formula defining the threshold for which taxable person have the right to register VAT invoices and/or calculations of adjustment in the URTI be recalculated in the beginning of the third working day following the adoption of the aforesaid Draft Law.

Upon its recalculation by the State Fiscal Service the formula shall automatically include the following:

• average (1/12) monthly VAT amounts reported as due and remitted to the budget or broken into installments over the last 12 months of the 4th quartile (i.e. "overdraft");
• amounts of VAT overpayments as of 1 July 2015;
• balance remaining in the taxable person's electronic VAT account as of the date on which the law came into legal force;
• negative values of VAT remaining outstanding as of 1 July 2015 that were reported by taxable persons in boxes 24 and 31 of the VAT returns for July/2nd quartile of 2015;
• VAT amounts stated in tax invoices/calculations of adjustments drawn up since 1 July 2015;
• VAT amounts charged upon import of goods as reflected in customs declarations, adjustment sheets and supplementary declarations registered since 1 July 2015.

Besides, several novelties were introduced as regards input of VAT, in particular the following:

• buyers shall be granted right to claim VAT credit based on the copies of tax invoices extracted from the URTI
• taxable persons who supply goods/services on a continuous and systematic basis shall have right to submit a single consolidated VAT invoice to every buyer paying VAT once a month. In this regard, supplies shall be deemed systematic when such goods/services are supplied to the same buyer twice a month and more.
• taxable persons shall be able to appropriate to the tax credit amounts under VAT invoices registered in the URTI within 365 days since the date on which such invoices were drawn up;
• VAT invoice standard form shall be simplified as well as from now on some requirements of VAT invoice (location of buyer/seller, type of civil contract) shall be deemed irrelevant and cancelled;
• the term for registration of VAT invoices drawn up during the period from 1 July 2015 to 30 September 2015 in the URTI shall be increased to 31 calendar days. Previously the aforesaid registration terms was equal to 15 days since the date on which tax invoices were drawn up;
• penalties shall not be imposed for delay to register in the URTI VAT invoices drawn up before 1 October 2015.

Similarly, seizure of funds in the electronic accounts of taxable persons regulated by the Law "On Enforcement Proceedings" shall be prohibited and seizures ordered earlier shall be lifted.

This will enable the Treasury to write-off the taxable persons' VAT debts by remittance of the unblocked funds to the state budget.

Moreover, taxable persons shall now be able to obtain statements on the movements of funds on their electronic accounts and VAT amounts remitted from their accounts to the budget directly from the SFS. Such statements shall serve as base for reflecting the VAT amounts in accounting records.