VAT refund

Benefits of Working with Prikhodko & Partners

When assisting with a budget VAT refund, it is important not only to complete the tax return correctly, but also to assess in advance which transactions may attract additional attention from the tax authorities.

By working with Prikhodko & Partners, you will receive:

• analysis of the specific circumstances – we assess not merely the general possibility of obtaining a VAT refund, but the origin of the negative VAT balance, supporting documents, counterparties, and potential tax risks;
• preparation for a State Tax Service audit – we identify weak points before the application is submitted and develop a legal position regarding transactions that may raise questions from the regulatory authority;
• a unified legal strategy – from submitting documents to responding to requests, preparing objections, filing an administrative appeal, or pursuing judicial protection;
• confidentiality and legal security – information about internal transactions, counterparties, and financial documents is used exclusively within the scope of legal support for the case.

Key Issues Regarding VAT Refunds

The procedure for determining the amount that may be subject to reimbursement is regulated by Article 200 of the Tax Code of Ukraine. For a legal entity to obtain a VAT refund, it is important that the amount claimed for reimbursement corresponds to the amount of tax actually paid to suppliers of goods or services or to the State Budget of Ukraine and does not exceed the registration amount determined in accordance with Article 200¹ of the Tax Code of Ukraine at the time the tax return is received by the regulatory authority.

Thus, VAT reimbursement is not a separate payment or benefit for a business. It is the return of that part of the negative VAT balance for which the statutory conditions have been met and the lawfulness of which has been confirmed in accordance with the established procedure.

Documents and Grounds for VAT Refund

The main prerequisite for obtaining a budget VAT refund is a properly formed negative VAT balance and a documented input VAT credit. Therefore, even before submitting the tax return, businesses should verify not only the accuracy of the calculations, but also the documents on the basis of which the relevant figures were formed.

Depending on the nature of the business transactions, the following documents may be provided to confirm the right to a VAT refund:

1. contracts with suppliers and customers;
2. delivery notes and consignment notes;
3. certificates of completed works or services rendered;
4. tax invoices and adjustment calculations registered in the Unified Register of Tax Invoices;
5. payment instructions, bank statements, and other documents confirming payment;
6. customs declarations – in the case of import transactions;
7. documents confirming the origin, movement, and use of goods;
8. accounting registers and documents that make it possible to trace the formation of the negative VAT balance.

The actual nature of business transactions should also be reviewed separately. During an audit, the tax authorities analyse not only the availability of formally prepared documents, but also the actual supply of goods or services, movement of assets, settlements, use of purchased goods in business activities, and the consistency of all primary documents.

To claim a budget VAT refund, the taxpayer submits a VAT return and an application with the relevant annexes.

VAT Refund Procedure

The VAT refund procedure in Ukraine consists of several consecutive stages.

First, the company determines the negative VAT balance and the amount it is entitled to claim for budget reimbursement. After verifying compliance with the registration limit and confirming actual VAT payment, the tax return and the required annexes are prepared.

The taxpayer’s application is included in the Register of Applications for the Refund of Budget Reimbursement Amounts.

The regulatory authority then verifies the lawfulness of the declared amount. A desk audit is conducted within 20 calendar days following the deadline for filing the tax return / adjustment calculation. If the document is submitted after the filing deadline, the period is calculated from the date of its actual submission.

Separately, the State Tax Service may conduct an unscheduled documentary audit, for example, if you have declared a negative VAT balance exceeding UAH 100,000. After the amount of budget reimbursement has been agreed, the relevant information is reflected in the Register and the reimbursement is transferred.

Typical Risks and Common Mistakes

One of the most common mistakes is treating a negative VAT balance as a guaranteed right to an automatic refund. In practice, it is necessary to determine separately which part of such negative balance meets the statutory requirements for reimbursement.

The most common problems arise due to:

• discrepancies between the VAT return, data from the Unified Register of Tax Invoices, and primary accounting documents;
• errors in determining the tax period in which the negative VAT balance arose;
• lack of proper evidence confirming actual payment;
• incorrectly prepared contracts, acts, invoices, and other primary documents;
• inconsistencies between the volume of purchased goods and their subsequent use;
• insufficient evidence confirming the actual nature of the business transaction;
• errors when completing the VAT return and its annexes;
• failure to take into account the risks of a tax audit by the State Tax Service.

Legal Assistance with VAT Refunds

It is advisable to begin legal support before filing the VAT return. This makes it possible to verify not only the arithmetic calculations, but also the documents on the basis of which the input VAT and negative VAT balance were formed.

A tax lawyer at Prikhodko & Partners conducts a legal audit of the transactions, identifies potential risk areas, reviews the documents required for the VAT refund, provides recommendations on correcting deficiencies, and supports communication with the State Tax Service.

If the regulatory authority initiates a documentary audit, the lawyer helps determine the scope of the audit, prepares responses to requests, analyses the audit report, and prepares objections.

If a tax notice-decision is issued, we assess the grounds for its administrative / judicial appeal and represent the business in disputes with the regulatory authority.

Important! The lawyer’s task is not limited to checking formal requirements. It also includes developing a legal position that takes into account the company’s specific transactions, available documents, and the risks associated with obtaining a budget VAT refund.

Stages of Cooperation with a Lawyer

The specific course of action may vary depending on whether the company is only planning to claim a budget VAT refund, is already undergoing an audit / has received a tax notice-decision.

Cost of Legal Services for VAT Refunds

The cost of legal support is determined individually after an initial analysis of the situation. The price primarily depends on the amount of work required from the lawyer and the stage at which the client seeks legal assistance.

If the company only needs a consultation and a preliminary assessment of its eligibility for a budget VAT refund, the scope of work will be smaller than in the case of a comprehensive review of business transactions covering several tax periods.

If the dispute has already moved to court proceedings, the preparation of procedural documents and representation in court are assessed separately.

The final format of cooperation and the cost of VAT-related legal services are agreed with the client after the lawyer analyses the specific circumstances and determines the required scope of assistance.

Conclusion

Obtaining a budget VAT refund for legal entities requires reviewing a much broader range of issues than simply completing a VAT return.

If your company needs to obtain a VAT refund, verify its eligibility for budget reimbursement, or challenge a decision of the State Tax Service, contact the lawyers at Prikhodko & Partners.

Do you still have questions about budget VAT reimbursement? Leave a request using the form below, and our lawyer will contact you.