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The Ministry of Finance of Ukraine once again announced changes to the VAT risk system

Further Changes to the Criteria for Stopping the Registration of Tax Invoices (TI) / Settlement Adjustments (SA) in Favour of the Payer

With the beginning of the new month, the Ministry of Finance of Ukraine once again announced changes to the VAT risk system.

The expert group working under the Ministry of Finance has already developed the draft law and the draft new order of the Ministry, according to which one should expect the following:

  • There will be established the “cut off” criterion – the tax burden corresponding to the level of 2-3% (currently, it is 5%). That is, the formula D>0,05, Р<Рм×1,3 will change in the part of D index;
  • Management of the Main Department of the State Fiscal Service of Ukraine (SFS) will have the right to independently resume the registration within 24 hours after its termination by using the criteria of the “credibility of the operation” based on the information available in the SFS databases;
  • The SFS will have the right to request additional documents, with mandatory indication of which document the Commission lacked to make a decision;
  • Taxpayers, who were denied the registration of the tax invoice in the first months of the system’s operation and who are in the process of administrative or judicial appeal, will be able to reapply to the SFS Commission with a request to review the previously submitted documents;
  • The form of the receipt will contain information about documents for each type of operation, which are recommended to be submitted for the Commission review for the purpose of reducing the number of errors;
  • The SFS will be given the right to make changes to the risk criteria after the mandatory approval of the Ministry of Finance.

The working group of the Ministry of Finance, which is drafting these changes, included the representatives of business associations, who pointed out the main problems faced by enterprises due to the imperfection of the existing mechanism. Thus, there is hope that the VAT risk system with the above new changes will significantly alleviate the current situation of taxpayers.

Also, we would like to remind you that the draft Law No. 7240 has been already submitted to the Ministry of Finance and provides for the introduction of the “tacit consent” principle – that is, a tax invoice will be automatically registered in case of violation of the 5-day period for reviewing payers’ applications.

This should significantly simplify the mechanism of appealing against the wrongful termination of TI registration, as there are many cases when the SFS does not respond to complaints for months, while the TI remains blocked. We have already written here, what to do in such a situation.

Iryna Kalnytska

Iryna Kalnytska

Partner, Head of Tax practice, Restructuring, Claims and Recoveries practice, Attorney at law

  • Recognitions
  • The Legal 500 EMEA 2020
  • Best Lawyers, Ukraine 2020
  • Who’s Who Legal 2020
  • Ukrainian Law firms. A Handbook for Foreign Clients 2019

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