On June 1, 2018, the Regulations on cash operations in the national currency of Ukraine, approved by the Resolution of the Board of the National Bank of Ukraine No. 148 dated 29.12.2017 (hereinafter referred to as “Regulations No. 148”), entered into force. One of the key changes proposed by the National Bank of Ukraine (hereinafter referred to as the NBU) is the return of the provisions on cash posting by means of including the relevant data into the accounting book of settlement operations (hereinafter referred to as “ABSO”). So let us try to figure out whether the return to the “era of ABSO” is a necessity and what consequences it will bring to business.
It is worth reminding that since the adoption of the new Regulation No. 148 dated 29.12.2017, the notion of cash posting has excluded the reference to the ABSO and left only a cashbook and an income and expenditure ledger.
On the one hand, the business felt a relief, as these changes for business were quite positive, given that often the fivefold penalties for non-posting of cash were applied precisely in connection with formal violations that were attributed to the ABSO. For example, for failing to enter the data in the ABSO or non-attachment of fiscal reporting checks.
At the same time, the norm of Regulation No. 148 proposed in the previous wording was not fully consistent with the content of other norms of the same Regulation, creating contradictions and obstacles in their application.
We are referring to clause 39 of the Regulation No. 148, according to which, separate subdivisions of institutions/enterprises, insurance agents, brokers, lotteries that perform cash settlements with the use of settlement operations registrars or ledgers and maintain the ABSO, but do not perform operations for accepting (issuing) cash under cash orders, as well as individual entrepreneurs, do not maintain a cashbook.
It would seem to be completely unambiguous, if the above requirements are met, a separate subdivision may not maintain a cashbook. However, despite the direct permission not to maintain the cashbook, the question arises regarding how to post cash received by a separate subdivision, which does not maintain the cashbook, because the Resolution No. 148 in the wording dated 29.12.2017 envisaged the only possible way of posting – accounting of cash in the full amount of actual revenues in the cashbook.
There were two opinions on this matter, one of the NBU, and the other – the State Fiscal Service of Ukraine (hereinafter referred to as “SFS”).
In particular, the NBU in a letter No. 50-0007/13560 dated 07.03.2018, noted that the cash revenues of the separate subdivisions, which do not maintain the cashbook, that is deposited by them into the cash desk of the bank through collectors is credited to the account of the enterprise – legal entity, in non-cash order and does not require posting in the cashbook of the enterprise a legal entity.
At the same time, the NBU for some reason did not take into account the period starting from the moment the funds were received by the entity before they were introduced into the account of such an entity, during which such funds, one way or another, were cash receipts and in accordance with the provisions of Regulation No. 148 were to be posted.
The SFS, in turn, expressed the view that the provisions of Regulation No. 148 contain contradictions, and therefore recommended that pending the introduction of appropriate amendments to the legislation separate subdivisions should maintain the cashbooks, even if they comply with the requirements of clause 39 of the Regulation No. 148, which allowed not to maintain it. For example, an individual tax consultancy No. 1343/6/99-99-14-05-01-15/ІПК dated 03.04.2018.
This position of the SFS contains a certain part of the truth, in particular regarding the inconsistency in the provisions of Regulation No. 148, but does not take into account one of the main principles of tax regulation, namely the presumption of the legitimacy of decisions of the taxpayer, which provides for the interpretation of conflicting rules of law in favour of the taxpayer.
Taking the abovementioned into account, even if a separate subdivision of the entity did not maintain the cashbook since 29.12.2018 and up to the entry into force of the amendments to the Regulation No. 148, penalties for non-posting of cash should not be applied.
At present, the NBU has attempted to resolve the above inconsistency. In particular, the concept of posting is set out in a new version. Accordingly, now cash postings determine the cash accounting of the subdivisions of the entities at the full amount of their actual receipts in the cashbook/ income and expenditure ledger/income ledger/ fiscal reporting/settlement receipts (paragraph 18, clause 3 of the Regulation No. 148).
From this definition, it can be concluded that a sufficient proof of the posting of cash by a separate subdivision that does not maintain a cashbook will be the presence of a fiscal reporting check or a settlement receipt. However, such a conclusion is premature.
Changes were also made to clause 11 of the Regulation No. 148, according to which, from now on, cash posting in cash desks of separate subdivisions of institutions/enterprises, as well as in cash desks of individual entrepreneurs, who perform cash settlements using settlement operations registrar and/or ABSO without a cashbook, is performed by means of performing the cash accounting in full amount of their actual receipts on the basis of the settlement documents by forming and printing fiscal reporting checks and attaching them to the corresponding ABSO pages/entry of the settlement receipts to ABSO.
In this case, taking into account the accepted changes to para 18 clause 3 of the Regulation No. 148, in determining the definition of “cash posting”, there is no information on the need to attach fiscal checks to the ABSO pages. This again leads to the introduction of two uncoordinated provisions and poses a risk of ambiguous interpretation of the rules on posting by business and fiscal authorities.
Thus, at present, with the adoption of changes in the separate units, there is again a risk of applying significant fines for formal violations to them, for example, due to the actual availability of fiscal reporting checks, but not their attachment to the ABSO. In order to minimize this risk, avoiding possible penalties and disputes with supervisory authorities, it is only possible to recommend that all fiscal reporting checks should be attached to the ABSO pursuant to the new provisions of clause 11 of the Regulation No. 148.
In our opinion, the intention of the NBU to clarify the application of the provisions of Regulation No. 148 is positive, but their implementation needs to be revised, in particular, in terms of harmonizing the notion and procedure for cash distribution by separate subdivisions that do not maintain a cashbook. We believe that sufficient proof of the cash posting by a separate subdivision that does not maintain a cashbook should be the very fact of possessing the fiscal reporting checks by such a separate subdivision without the need for their obligatory attachment to the ABSO.
Partner, Head of Tax practice, Restructuring, Claims and Recoveries practice, Attorney at law
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