New in VAT refund

Law of Ukraine No. 909-VIII “On Amendments to the Tax Code of Ukraine and Some Other Legislative Acts of Ukraine on Provision of Balance of Budget Revenues in 2016,” which became effective in early 2016, canceled an automatic VAT refund.

Pursuant to the Tax Code of Ukraine currently in force, two registers of VAT refund applications will be maintained this year.

The first register will include applications from VAT payers meeting all of the following requirements: 

1. the VAT payer’s export supplies comprise at least 40% of the taxpayer’s total annual supplies;
   
   
2. the VAT payer’s non-current asset value is three times higher than the amount of the claimed VAT refund or the VAT payer has received a one-year financial guarantee from State Savings Bank of Ukraine PJSC, State Export-Import Bank of Ukraine PJSC or Ukrgasbank PJSC;
   
   
3. the Unified State Register contains no records of unconfirmed information about the VAT payer, the VAT payer’s absence at the registered office address, etc.; and
   
   
4. there are no bankruptcy proceedings pending against the VAT payer.

The second register will include applications from VAT payers that do not meet the above requirements.

On February 22, 2016, Resolution No. 68 of the Cabinet of Ministers of Ukraine approved the Procedure for Maintaining the Registers of Value-Added Tax Refund Applications (the “Procedure”).

The Procedure sets out the mechanisms by which the VAT refund applications filed by VAT payers will be included in the first and second registers and also the mechanisms for including information on the processing status of each application in the said registers and on the publishing status of the registers. The registers of VAT refund applications will include applications filed after February 1, 2016. The Procedure provides that the SFS shall publish the registers on its official website on a daily basis.

Each of the registers will consist of two parts. The first part of the registers will contain information on the application filing date, the tax return number or the adjustment calculation number, the taxpayer’s name or full name, and the taxpayer’s individual taxpayer identification number.

The second dynamic part of each register will be updated on a daily basis to include up-to-date information on the current processing status of the VAT payer’s application. It will consist of 14 columns containing information on: 

1. the date when the STS’s territorial body sent notice to the taxpayer of refusal to accept the tax return or the adjustment calculations;
   
   
2. the tax amount claimed to be refunded to the taxpayer’s bank account as stated in the application;
   
   
3. the date when the STS’s territorial body approved the refundable tax amount stated in the application;
   
   
4. the date when the STS’s territorial body issued its opinion indicating the refundable tax amount that was forwarded to the Treasury’s territorial body;
   
   
5. the refundable tax amount as indicated in the opinion issued by the STS’s territorial body;
   
   
6. the date of the tax notification-decision indicating the unapproved tax amount claimed for refund as stated in the application;
   
   
7. the number of the tax notification-decision indicating the unapproved tax amount claimed for refund as stated in the application;
   
   
8. the unapproved tax amount claimed for refund as stated in the application according to the tax notification-decision;
   
   
9. the start date of the appeal proceedings against the tax notification-decision;
   
   
10. the appealed unapproved tax amount claimed for refund;
    
    
11. the end date of the appeal proceedings against the tax notification-decision;
    
    
12. the refundable tax amount approved as a result of the appeal proceedings;
    
    
13. the date of return of the refundable tax amount to the taxpayer’s bank account; and
    
    
14. the refundable tax amount returned to the taxpayer’s bank account. 

The registers will be kept in a chronological manner in the sequence of inclusion of the tax returns or adjusting calculations to which respective applications pertain. The applications will be automatically added to the respective register during the banking day of their receipt in the chronological sequences of their arrival.

If the tax authority determines that the taxpayer does not meet the requirements for inclusion of its application in the first register, such authority must forward its decision to the taxpayer, together with detailed calculations and explanations for the refusal.

In its turn, the taxpayer may appeal this decision.