U-Tax Blog

I was glad to speak at the meeting of the Committee on Tax and Custom Law of the Ukrainian Bar Association on the topic of the suspension of the registration of VAT invoices.

My speech, in particular, concerned the changes to the procedure for the suspension of the registration of VAT invoices brought by the Resolution of the Cabinet of Ministers of Ukraine No. 1428 dated 23 December 2022. The Resolution entered into force on 11 January 2023. It became a kind of compromise between the interests of business and the government in the light of the unprecedented fiscal pressure caused by the system of the suspension of the registration of VAT invoices in the second half of 2022.

Below is a brief summary of the most important changes introduced by the Resolution:

1) Automatic registration of a VAT invoice in case the tax authorities accept the data table of the VAT taxable person subject to certain conditions (does not apply where the regional commission of the tax authorities has already made a decision to decline the registration of the VAT invoice).

2) Unconditional registration of a VAT invoice. It is possible if there is no decision on the compliance of the VAT taxable person with the criteria of riskiness and the CEO of the taxable person holds a similar position in no more than three VAT taxable persons. For unconditional registration, the amount of supplies in one concerned VAT invoice must not exceed UAH 5,000, and the total monthly amount of supplies must not exceed UAH 500,000.

3) The obligation to indicate in the decision on compliance of the VAT taxable person with the criteria of riskiness the detailed information according to which the compliance of the VAT taxable person with a certain criterion of riskiness is established, including: (i) the type of the transaction (purchase or supply); (ii) period of the transaction; (iii) the code of the product involved; and (iv) information about the counterparty of the VAT taxable person involved in the risky transaction.

4) In the context of the notorious paragraph 8 of the criteria of riskiness, a list of tax information codes was introduced (approved by the order of the State Tax Service of Ukraine dated 11 January 2023 No. 17). The tax information code must be indicated in the decision on compliance of the VAT taxable person with the criteria of riskiness based on the specified paragraph 8. The list of codes practically does not change the situation in favor of VAT taxable persons. It has 18 codes which cover almost all the grounds for the riskiness of the VAT taxable persons that the tax authorities can come up with. In the list, for example, you can find an insufficient number of labor resources, the implementation of the transaction with the counterparty in respect of which a decision has already been made on compliance with the criteria of riskiness, and a number of other common grounds for "riskiness" used by the tax authorities in practice.