Businesses report about their work being complicated due to tax audits

28/ 10/ 2022

According to the EBA member companies, the VAT refund problem is becoming more systemic. Thus, in order for a VAT refund to take place, the tax authorities must confirm the declared amounts of such refund – either by conducting an audit (if the part of refund is significant) or by automatic confirmation. However, currently, for unknown reasons, the tax authorities do not appoint desk tax audits (which can be carried out remotely) to confirm the VAT amounts claimed for a refund but require documentary inspections directly at the companys office, which, in turn, are postponed due to the dangerous situation. Obviously, such delays slow down both the receipt of working capital by companies and generally negatively affect the business activity of companies. In addition, most of these companies are exporters, which is one of the few sources of foreign exchange earnings to the state budget today. No less urgent now is the issue of blocking VAT invoices, which became more frequent in October, so most entrepreneurs are forced to go to court to establish justice, which obviously takes a long time. Moreover, the amendments to the Tax Code also set a deadline for taxpayers to register tax invoices in the Unified Register of Tax Invoices for February-May – until July 15, 2022. However, unfortunately, many companies have received penalties for registering tax invoices on the last day – July 15, although the Ministry of Justice has officially clarified that the deadline is included in the specified period. Therefore, the registration of the mentioned documents by taxpayers on July 15, 2022, is not a violation. The European Business Association is convinced that now, more than ever, business and government representatives must be in dialogue and cooperation to get through this difficult time and hold the economy together. Therefore, the business is inviting the representatives of the Tax Service of Ukraine for a dialogue. Moreover, we ask to consider the possibility of conducting desk audits for VAT refunds. We hope the voice of the community will be heard!

According to the EBA member companies, the VAT refund problem is becoming more systemic.

Thus, in order for a VAT refund to take place, the tax authorities must confirm the declared amounts of such refund – either by conducting an audit (if the part of refund is significant) or by automatic confirmation.

However, currently, for unknown reasons, the tax authorities do not appoint desk tax audits (which can be carried out remotely) to confirm the VAT amounts claimed for a refund but require documentary inspections directly at the company’s office, which, in turn, are postponed due to the dangerous situation.

Obviously, such delays slow down both the receipt of working capital by companies and generally negatively affect the business activity of companies. In addition, most of these companies are exporters, which is one of the few sources of foreign exchange earnings to the state budget today.

No less urgent now is the issue of blocking VAT invoices, which became more frequent in October, so most entrepreneurs are forced to go to court to establish justice, which obviously takes a long time.

Moreover, the amendments to the Tax Code also set a deadline for taxpayers to register tax invoices in the Unified Register of Tax Invoices for February-May – until July 15, 2022. However, unfortunately, many companies have received penalties for registering tax invoices on the last day – July 15, although the Ministry of Justice has officially clarified that the deadline is included in the specified period. Therefore, the registration of the mentioned documents by taxpayers on July 15, 2022, is not a violation.

The European Business Association is convinced that now, more than ever, business and government representatives must be in dialogue and cooperation to get through this difficult time and hold the economy together. Therefore, the business is inviting the representatives of the Tax Service of Ukraine for a dialogue. Moreover, we ask to consider the possibility of conducting desk audits for VAT refunds. We hope the voice of the community will be heard!