Blocking the registration of VAT invoices has become more frequent

15/ 09/ 2020

As reported by the EBA member companies, the number of cases of blocking the registration of VAT invoices and adjustments to them have recently become more frequent.

According to the companies, the reasons for the blockage are not specified in the majority of cases. There are also no specifications regarding additional documents required to unlock such invoices or adjustment calculations. As an example, the decision to block tax invoices or VAT adjustment calculations may indicate the absence of a UKTZED code or activity type code in the taxpayer’s data tables while these same tables do contain the codes that are claimed to be missing.

It should also be noted that the riskiness criteria of the VAT payer are approved by Resolution №1165 of the Cabinet of Ministers, which contains a number of contradictory rules, which, among other things, allows the State Tax Service to manually block the registration of tax invoices.

Besides, when blocking the invoice, the State Tax Service does not specify in its decisions what exactly entails the riskiness of the taxpayer. At the same time, all subsequent invoices of the taxpayer are automatically blocked, and the company automatically receives receipts on suspending the registration of all tax invoices/adjustment calculations. The blockage affects even those invoices that do not belong to the operation, which, in the opinion of the supervisory authority, is risky without no reason. Such decisions can be appealed administratively without the physical presence of the companies, so it is not always possible to provide sufficient explanations and evidence.

While it will take a lot of time to unlock the process, the blockage, based on the riskiness of the taxpayer, leads to the suspension of economic activity, which further undermines the national economy in times of quarantine.

As a result, the taxpayer’s counterparty loses the possibility to use the tax credit at best in the period of issuance of the VAT invoice, and at worst it will never be able to use it again.

On the top of all, the business is disturbed by situations when zero VAT adjustment calculations that do not change the amount of the supplier’s tax liabilities are blocked because they contain a change in the nomenclature, and the buyer, accordingly, loses the right to a tax credit.

One of the ways to solve the problem is to amend the Resolution №1165 of the Cabinet of Ministers in terms of improving the criteria of the taxpayer’s riskiness. It is a matter of obliging the State Tax Service to consider such complaints in the presence of company representatives. In addition, the State Tax Service should be obliged to indicate in its decisions the specific information on the riskiness of the taxpayer or the riskiness of the transaction.

Therefore, the European Business Association appeals to the Cabinet of Ministers, the Ministry of Finance, and the State Tax Service of Ukraine to stop the unjustified blockage of VAT invoices, thereby effectively forcing companies to pay double VAT to the budget – both by the supplier and the buyer (as the blocked tax invoice is not considered to be paid ). The business proposes to implement the suggestions mentioned above to ensure the legality of the invoice registration procedure. We hope the voice of business will be heard.


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