Accounting for the export of goods

Export operations require increased control over compliance with currency legislation and proper accounting. An accountant in the field of foreign economic activity plays an important role for business, optimizing processes and controlling calculations (including exchange rate differences). We will talk about the main difficulties in accounting for the export of goods and how our accountant helps in this article.

Export of goods: the concept of export operations

The processes of exporting products beyond the customs border of Ukraine for further sale to foreign partners (export operations) are regulated by the current Customs Code and the Law of Ukraine “On Foreign Economic Activity”. They include several types of activities, in particular:

• final export of goods (without obligations to return them);
• sale of goods to a foreign entity without export;
• re-export of goods (export of goods that were previously imported).

There is a clear procedure for starting the implementation of the relevant export operation. First, you need to undergo a customs inspection and obtain a registration number (for those who have not yet been registered with the customs authority). Second, you need to prepare a foreign economic contract and primary documentation for the implementation of the relevant export operation in accordance with the terms of delivery in Incoterms 2020. Third, go through customs clearance, additionally preparing such documents as a certificate of origin of the goods and receipts for payment of state duty.

Primary documentation for export operations: what are the main types?

Accounting for export operations, as a general rule, begins with the preparation of primary documents. To successfully pass customs control, you must provide:

1. invoice;
2. shipping documents (invoices for preliminary purchase, calculations, quality certificate);
3. transport documents (CMR, bill of lading, railway consignment note, etc.);
4. documents confirming the fact of transfer of goods (deed of acceptance and transfer, packing lists).

Please note! An important role for accounting is played primarily by the customs declaration. Export operations are registered with a customs declaration with the letter code “EK” (for example, EK10AA), which serves as the basis for applying preferential VAT, calculating budget reimbursements, etc. For more detailed information, we recommend consulting one of our professional accountants in the field of foreign economic activity.

Features of accounting for the export of goods

Accounting is carried out taking into account the following features:

• firstly, the correct calculation of exchange rate differences (arising from fluctuations in the exchange rate between the date of shipment of the goods and the date of receipt of payment);
• secondly, taking into account the FCA delivery terms according to Incoterms 2020 (the seller is responsible for customs clearance, which involves accounting for additional costs);
• thirdly, compliance with currency control and payment deadlines (today, the payment deadline for export contracts is 180 calendar days, for some cases – 120 days).

Preferential VAT when exporting goods: what are the key points of accounting?

For the export of goods in Ukraine, VAT is applied at a rate of 0%. However, there are some cases when, instead of a zero rate, an exemption from taxation applies (in other words, preferential VAT). These two cases have significant differences in accounting.

According to current national legislation, the following operations are exempt from VAT:

1. export of waste and scrap (ferrous and non-ferrous metals, waste paper);
2. re-export (in some cases).

It is also worth emphasizing that due to the lack of reimbursement of “input” VAT by the state in the case of application of preferential taxation conditions, the financial burden may increase.

What services can an accountant at Prikhodko & Partners Law Firm provide in the field of foreign economic activity?

Accountants of our law firm, specializing in foreign economic activity, provide a wide range of services covering all aspects of doing business. They can provide you with financial transparency, legality of activities, as well as optimization of income and expenses. The main services of our accountants include:

• introductory consultations on key issues (accounting policy, currency control, taxation);
• maintaining accounting and tax reporting (additionally, submitting tax returns through the Electronic Taxpayer’s Office);
• correct storage and preparation of primary documentation for accounting for the export of goods (issuance of invoices, acts, invoices, etc.);
• calculation of VAT in transactions in the field of foreign economic activity and its payment;
• accounting for currency transactions, correct reflection of exchange rate differences;
• assistance in developing and implementing accounting policies in the field of foreign economic activity.

An accountant, by accounting for the export of goods, helps the enterprise avoid legal risks and optimize the tax burden. To find out the cost of his services, fill out the form below.