Changes in the Procedure for Registering Tax Invoices/Adjustment Calculations

On January 12, 2023, the Verkhovna Rada of Ukraine adopted in its entirety the Draft Law “On Amendments to Subsection 8 of Chapter XX of the Tax Code of Ukraine Regarding the Prohibition of Gambling Business on the Simplified Taxation System” (No. 8079).

Strictly speaking, in addition to the return of the restriction on the prohibition of staying on the simplified taxation system to business entities that are engaged in the organization, conduct of gambling, lotteries (except distribution of lotteries), bets (bookmaker bets, totalizer bets), the Law contains several innovations regarding registration of tax invoices/adjustment calculations.

Thus, during the period of martial law and within 6 months after its termination, the registration of tax invoices and/or adjustment calculations in tax invoices in the State Tax Administration shall be carried out taking into account the following deadlines:

• for TIs/ACs to tax invoices drawn up from the 1st to the 15th calendar day (inclusive) of the calendar month – to the 5th calendar day (inclusive) of the calendar month following the month in which they were drawn up;

• for TIs/ACs to tax invoices drawn up from the 16th to the last calendar day (inclusive) of the calendar month – to the 18th calendar day (inclusive) of the calendar month following the month in which they were drawn up;

• for ACs drawn up by the supplier of goods/services to the tax invoice drawn up for the recipient – the tax payer, in which a reduction in the amount of compensation for the value of goods/services to their supplier is provided – within 18 calendar days from the date of receipt of such calculation of adjustment to the tax invoice by the recipient (buyer).

Additionally, during the period of martial law and within 6 months after its termination, the fine for violation by VAT payers of the above-mentioned deadline for registration of TIs and/or ACs to such a tax invoice in the United Register of Tax Invoices is set in the amount:

• 2 percent of the amount of VAT specified in such TI/AC – in case of violation of the registration period of up to 15 calendar days;

• 5 percent of the amount of VAT specified in such TI/AC – in case of violation of the registration period from 16 to 30 calendar days;

• 10 percent of the amount of VAT specified in such TI/AC – in case of violation of the registration period from 31 to 60 calendar days;

• 15 percent of the amount of VAT specified in such TI/AC – in case of violation of the registration period from 61 to 365 calendar days;

• 25 percent of the amount of VAT specified in such TI/AC – in case of violation of the registration period for 366 or more calendar days.

That is, we see that fines for untimely registration of TIs/ACs have been reduced to 2-5-10-15-25% of the VAT amount instead of 10-20-30-40-50% depending on the term of such violation.

Another innovation envisaged by this Draft Law is an increase in the period of operation of electronic services of the State Tax Service from 8:00 a.m. to 8:00 p.m. (currently they work until 6:00 p.m.) during the period of martial law. In addition, the operating day for registration of a TI and/or AC, on which the deadline for registration falls, lasts from 0:00 hours to 24:00 hours, i.e. around the clock.

A receipt for acceptance or rejection, or stoppage of registration in respect of TIs/ACs submitted for registration in the National Tax Registry during the operating day on which the deadline for registration of a TI and/or AC falls, may be sent to the taxpayer no later than the next operating day.

If during the next operating day after the operating day on which the deadline for registration of a TI and/or AC falls, a receipt is not sent on acceptance or rejection, or stop of registration of TIs/ACs, such tax invoice is considered registered in the United Register of Tax Invoices.

The confirmation to the seller of the acceptance of their TI and/or AC to the United Register of Tax Invoices is an electronic receipt in text format, which is sent no later than the next business day.

Undoubtedly, such changes will to some extent facilitate the situation for businesses with TIs/ACs registration, while they will not fundamentally change the state of affairs. In order to support business, it is considered critically necessary to stop any blockade of TIs/ACs during the period of martial law.