ALTERNATIVES TO BUDGET REFUNDS ON VAT

 Negative issues are not very common among business people, but they remain extremely relevant. Thus, if the amount of tax credit reflected in line 17 of the VAT return in the reporting month is greater than the amount of tax liabilities (reflected in line 9 of the Declaration), the business entity has a negative value from VAT (hereinafter - NV).

 Most people know that such NV can be left for the next reporting period for use or apply for reimbursement from the budget, which is used. However, the payer can go the other way, using it also to pay:

• tax debt on value added tax (line 20.1 in the Declaration);
• other payments to the state budget (line 20.2.2 in the Declaration).

 The decision on what to do with the tax credit, the taxpayer indicates in a specific line of the third section of the Declaration and sends to the supervisory authority. Further consideration is given, the results of which can be both positive and negative. To avoid refusal, it is necessary to responsibly fill in the Declaration in strict accordance with paragraph 200.4 of the Tax Code of Ukraine, which regulates the restrictions of the business entity in the free choice of the direction of use of such tax credit.

 The above-mentioned norm of the Tax Code stipulates that the primary use of the tax credit (VAT) is carried out to repay the VAT tax debt that arose in previous periods. However, it should be noted that the amount of such repayment in the reporting period may not exceed the size of the registration limit, which is determined at the time of receipt by the controllers of the declaration of value added tax.

How to calculate the amount of the registration limit is reflected in paragraph 200-1.3 of the Tax Code?

 Its value is indicated in line 19.1 of the VAT return. In order to find out its size and indicators that form it, you need to send a request to the State Tax Service of Ukraine in electronic form for which an extract will be sent (link https://cabinet.sfs.gov.ua/).

 It should be noted that the registration limit of the payer in this context can be increased only by the amount received from his own current account (ie real money). Its increase from other sources is not provided by the current legislation, and therefore is not applied by tax authorities.

 A tax debt that can be repaid with a negative value means not only the unpaid amount of tax liabilities, but also unpaid penalties and fines. In addition, the amount of debt may not exceed the negative value of value added tax.

 Lawyers and attorneys at Prikhodko & Partners provide a wide range of tax services. Contact us, we will be happy to become your legal partner and advisor!