Unblocking Tax Invoices: Will It Be the Same for Everyone?
Before New Year, our legislators traditionally adopt and publish numerous changes in the tax legislation.
The change from 2017 to 2018 was no exception. Thus, on December 7, 2017, the Law of Ukraine No.2245-VII “On Amending the Tax Code of Ukraine and Certain Legislative Acts of Ukraine on Ensuring the Balance of Budget Revenue in 2018” was adopted and officially published on December 30, 2017 (newspaper “Golos Ukrainy” No.248 (6753) dated December 30, 2017).
The Law provides for the numerous changes in the tax legislation.
The most expected change for business, perhaps, was the abolition of the “blocking” of tax invoices from January 1, 2018, at least until March 1, 2018.
It became possible in connection with the exclusion of clause 74.2, article 74, of the Tax Code of Ukraine, which provided for the continuous automated monitoring of tax invoices and adjustment calculations for compliance with the criteria for the risk assessment sufficient to stop the registration of such tax invoices/adjustment calculations.
In addition, paragraph 201.16 Art. 201 of the Tax Code of Ukraine has also been amended, according to which (new edition) “registration of a tax invoice/adjustment calculation in the Unified Register of Tax Invoices can be suspended in the manner and on the grounds determined by the Cabinet of Ministers of Ukraine”.
Therefore, if earlier the grounds for suspending the registration of the tax invoice/adjustment calculations (hereinafter - TI/AC) were the compliance of their set of criteria for assessing the risk degree which was approved by the Ministry of Finance of Ukraine, but now the procedure and grounds should be determined by the Cabinet of Ministers of Ukraine.
It’s quite strangely, but the legislator obliged the Cabinet of Ministers of Ukraine with the clause 7 on the “Final and transitional provisions” of the of the Law of Ukraine No.2245-VII to determine only the procedure for suspending the registration of the TI/AC by March 1, 2018. It does not refer to determining the grounds by the Cabinet of Ministers of Ukraine for suspending the registration of TI/AC in the “Final and transitional provisions”.
Therefore, it is not clear whether the Cabinet of Ministers of Ukraine will determine the grounds for suspending the registration of the TI/AC or not. As the legislator did not actually oblige it to do it. Such inconsistency of norms within the framework of one law testifies once again to the extremely low level of lawmaking techniques of the legislator, while neglecting, it creates more and more legal conflicts and legal uncertainty.
The pleasant news was that the TI/AC, which registration was suspended, should be registered no later than January 2, 2018 (XX Section of “Transitional Provisions” of the TCU was supplemented with the clause 57). Therefore, on the first working day of 2018, the TI/AC should be registered. Taking into account that there are no references for resubmission of the TI/AC to the Unified Register of Tax Invoices, their registration should occur automatically.
But everything is not as simple as you would like it to be.
First, TI/AC is not subject to automatic registration:
- in respect of which, as of December 1, 2017, explanations and copies of documents are not provided in accordance with subparagraph 201.16.2 of clause 201.16 of article 201 of this Code;
- in respect of which a decision was made to refuse to register a tax invoice/adjustment calculation in the Unified Register of Tax Invoices and for which, as of December 1, 2017, no administrative or judicial appeal procedure was initiated.
Secondly, TI/AC, which registration was suspended from December 1, 2017 until the day of entry into force of the Law of Ukraine No.2245-VII, and for which the taxpayer submitted explanations and copies of documents after December 1, 2017, are registered in the Unified Register of Tax Invoices in the order, which acted before the entry into force of the Law of Ukraine No.2245-VII.
In this case, if within five working days from the date of provision of explanations and copies of documents the decision to register or refuse to register the TI/AC is not accepted and/or not sent to the taxpayer, their registration is carried out on the next working day following the expiry date of consideration of explanations and copies of taxpayer’s documents.
That is, if the taxpayer after December 1, 2017 filed explanations and copies of documents (therefore, conscientiously fulfilled the requirements of the current legislation), then he is in a not very favorable position. As its TI/AC will be registered only after reviewing the documents and taking an appropriate decision. And if the decision is not made in his favor, then such a taxpayer will have to be involved in administrative and/or judicial red tape for a long time.
What determines such a special attitude of the legislator to the TI/AC, which registration was suspended for the period from 01.12.2017 until the entry into force of the Law of Ukraine No.2245-VII, remains unknown. It is also unclear why this period, moreover, is made dependent on a conscientiously executed prescription of the current legislation by the taxpayer. That is, compliance with the requirements of the current legislation, in contradiction to all laws of logic, entails probable occurrence of negative consequences, whereas inaction (failure to provide explanations and documents) removes the burden of proving the legitimacy of its tax indicators, and eliminates these risks.
Another interesting rule of this Law is the suspension of the paragraph of the third clause of 201.10. of article 201 of the Tax Code of Ukraine. This means that from now on TI/AC registered after the entry into force of the Law of Ukraine No.2245-VII, is no longer the only and sufficient basis for calculating tax amounts for the buyer, and now such TI/AC requires another additional confirmation.
This will certainly stimulate the tax authorities to conduct inspection on the formation of VAT, to which they have lost interest for some time. However, the suspension of this rule does not change much, because the formation of tax indicators should always be carried out on the basis of primary, duly drawn up documents.
Thus, the Law of Ukraine No.2245-VII (in that version in which it exists), which temporarily suspends the “blocking” of tax invoices, is ambiguous in some of its provisions, and we will see the consequences of its adoption only after a while.
In any case, the experts of Finance Business Service always follow the developments in this direction, and are ready to help their clients solve complex and ambiguous tasks at any time with regard to the practical application of the current legislation.