Amendments to the Legislation on the Registration of Tax Invoices and Complaints against the Decisions of Controlling Bodies

Resolution of the Government No. 574 of June 2, 2023 amends the Resolution No. 1165 of December 11, 2019, which approves the Procedure for Stopping the Registration of a Tax Invoice/Adjustment Calculation in the Unified Register of Tax Invoices and the Procedure for Considering a Complaint on the Decision to Refuse to Register a Tax Invoice/Adjustment Calculation in the Unified Register of Tax Invoices. Main important changes, which will have consequences for taxpayers, are described below.

1. Changes to the Procedure for Stopping the Registration of a Tax Invoice/Adjustment Calculation in the Unified Register of Tax Invoices

1.1. A Feature of Unconditional Registration Has Been Clarified

The Procedure determines that tax invoices/adjustment calculations (with some exceptions) submitted for registration in the Unified Register of Tax Invoices (hereinafter referred to as the “URTI”) shall be verified for compliance with the features of unconditional registration. The list of features is given in the Procedure.

In the current version of the Procedure, one of these features is the case when the tax invoice/adjustment calculation shows a transaction with the goods coded according to the Ukrainian Classifier of Foreign Economy Goods (UKTZED) and/or a service coded according to the State Classifier of Products and Services (DKPP), which are indicated in the taxpayer’s data table, considered by the controlling body.

The above provision is clarified by the amendments to the Procedure. It was determined that a feature of unconditional registration is a situation when the tax invoice/adjustment calculation shows only the transaction with the goods under the UKTZED code/conditional product code and/or service under the DKPP code, which are indicated in the considered table of the taxpayer’s data provided that, in relation to the taxpayer who submitted such a tax invoice/adjustment calculation for registration in the URTI, there is no valid decision on the compliance of the taxpayer with the taxpayer’s riskiness criteria.

1.2. Changes to the Procedure for Making Decision on the Taxpayer’s Riskiness

The current rule of the Procedure stipulates that if the taxpayer complies with the riskiness criteria in accordance with paragraph 8 of Appendix 1, the relevant sections of the decision shall include detailed information, according to which the taxpayer’s compliance with the riskiness criteria, the type of transaction (purchase/supply), the period of the economic operation, according to the UKTZED/DKPP code/conditional product code, the tax number of the taxpayer involved in the risky transaction.

We will remind you that paragraph 8 of Appendix 1 provides such a basis for recognizing a risky payer, if the controlling authorities have tax information that has become known in the course of the current activity during the performance of the tasks and functions entrusted to the controlling bodies, which determines the riskiness of the economic transaction specified in the tax invoice/adjustment calculation submitted for registration. This provision is widely used by regulatory bodies as a basis for making a decision on riskiness.

The amendments to the Procedure provide for the addition that the decision to recognize the taxpayer as risky must also contain the date of inclusion of the taxpayer involved in the risky operation in the list of taxpayers who meet the taxpayer’s riskiness criteria.

In addition, it is provided that in the decision on the compliance of the taxpayer with the requirements of paragraph 8 of Appendix 1, the regional level commission considers the available information, which testifies to the compliance of the taxpayer with the taxpayer’s riskiness criteria, revealed during the monitoring of economic transactions reflected in tax invoices/adjustment calculations submitted for registration in the URTI, including tax invoices/adjustment calculations the registration of which has been stopped.

Therefore, such a decision should become more motivated, and controlling bodies will be obliged to indicate the reasons for its adoption in writing.

1.3. Cases When a Decision on the Taxpayer’s Riskiness Cannot Be Made

The decision on compliance with the taxpayer’s riskiness criteria exceeding 180 days before the date of making a decision cannot be a basis for considering the issue of the taxpayer’s compliance/non-compliance with the taxpayer’s riskiness criteria according to paragraph 8 of Appendix 1.

1.4. Responsibilities of Regional Level Commissions Regarding the Execution of a Decision on Riskiness Based on the Results of Review of the Payer’s Documents Have Been Supplemented

If, based on the results of the review of information and copies of documents, which testify to the taxpayer’s non-compliance with the requirements of paragraph 8 of Appendix 1, the regional level commission makes a decision on the taxpayer’s compliance with the criteria of the taxpayer’s riskiness, such a decision shall state:

– up-to-date information on tax information that became the basis for consideration of the taxpayer’s compliance with the taxpayer’s riskiness criteria, and risky transactions reflected in the previous decision on compliance with the taxpayer’s riskiness criteria;

– information on the transactions reflected in the tax invoice/adjustment calculation, the date of submission for registration in the URTI, which is no earlier than 180 days before the date of a preliminary decision on compliance with the taxpayer’s risk criteria.

In the event that the regional level commission makes a decision on compliance with the taxpayer’s riskiness criteria based on the results of the review of information and copies of documents that testify to the taxpayer’s non-compliance with the taxpayer’s riskiness criteria, the previous decision on compliance with the taxpayer’s riskiness criteria becomes invalid.

1.5. Date of Entry into Force of the Decision on Riskiness Has Been Determined

The decision on compliance/non-compliance with the taxpayer’s riskiness criteria enters into force on the day of the meeting of the regional level commission and the adoption of the relevant decision.

1.6. TIs/ACs Are Subject to Registration in the Case of a Decision on Non-Compliance of the Payer with the Riskiness Criteria

In the event that the regional level commission makes a decision about the taxpayer’s non-compliance with the taxpayer’s riskiness criteria based on the information and copies of documents submitted by the taxpayer to confirm non-compliance with the taxpayer’s riskiness criteria, or the central level commission makes a decision to satisfy the complaint and cancel the regional level commission’s decision on compliance of the taxpayer to the criteria of the taxpayer’s riskiness, on the next business day after the date of such decision, tax invoices/adjustment calculations are subject to automatic registration, if the following conditions are simultaneously met:

– registration of such tax invoices/adjustment calculations is stopped on the basis of the taxpayer’s compliance with the taxpayer’s riskiness criteria in accordance with the decisions taken starting from the date of the last inclusion of the taxpayer in the list of taxpayers who meet the taxpayer’s riskiness criteria, until the date of submission of information and copies of documents, based on the results of consideration of which a decision was made about non-compliance with the taxpayer’s riskiness criteria;

– the date of submission for registration in the URTI of such tax invoices/adjustment calculations falls within a period not exceeding 180 days before the date of submission of information and copies of documents, based on the results of consideration of which a decision was made on non-compliance with the taxpayer’s riskiness criteria or a decision on compliance with the taxpayer’s riskiness criteria, if in relation to such a decision, the central level commission satisfied the complaint and canceled the decision of the regional level commission on the compliance of the taxpayer with the taxpayer’s riskiness criteria;

– at the beginning of the business day during which such automatic registration in the URTI is carried out, the transactions in such tax invoices/adjustment calculations do not meet the criteria for the riskiness of transactions in accordance with Appendix 3 (“Riskiness Criteria of Transactions”) and, in relation to the taxpayer, there is no valid decision on the compliance of the taxpayer with the taxpayer’s riskiness criteria;

– with regard to such tax invoices/adjustment calculations of the taxpayer, the regional level commission did not make a decision on registration/refusal to register tax invoices/adjustment calculations in the URTI in accordance with the Procedure for Considering a Complaint on the Decision to Refuse to Register a Tax Invoice/Adjustment Calculation in the Unified Register of Tax Invoices, approved by the Order of the Ministry of Finance dated December 12, 2019 No. 520;

– on the day of such automatic registration in the URTI, the available tax amount for which the taxpayer has the right to register such tax invoices and/or adjustment calculations in the Register, calculated in accordance with clause 200¹.3 or 200¹.9 of Article 200¹ of the Tax Code of Ukraine (these norms determine the procedure for calculating the amount for which the taxpayer has the right to register tax invoices and/or adjustment calculations).

The Resolution also sets out in a new version certain criteria for the riskiness of transactions, the form of a decision on compliance/non-compliance of a value-added tax payer with the taxpayer’s riskiness criteria, a decision on taking into account/not taking into account the data table of a value-added tax payer, etc.

2. Changes to the Procedure for Considering a Complaint on the Decision to Refuse to Register a Tax Invoice/Adjustment Calculation in the Unified Register of Tax Invoices

The name of the Procedure is set out in the new edition, and it is determined that the Procedure determines the mechanism for handling complaints:

– regarding the decision of the regional level commission on the refusal to register the tax invoice/ adjustment calculation in the URTI;

– regarding the decision of the regional level commission to disregard the data table of the value-added tax payer;

– regarding the decision of the regional level commission on compliance of the value-added tax payer with the taxpayer’s riskiness criteria.

In contrast to this, the current version provides only a mechanism for considering a complaint regarding the decision of the regional level commission on refusal to register a tax invoice /adjustment calculation in the URTI.

The main provisions of the amendments to the Procedure stipulate for:

2.1. Terms and Order of Complaint Submission

The complaint shall be filed by the value-added tax payer within 10 working days following the day of the regional level commission’s decision.

The complaint shall be submitted by the taxpayer in electronic form by means of electronic communication.

2,2. Decisions that Cannot Be Appealed

In accordance with the Procedure, the decisions of the regional level commission, appealed by the taxpayer in court, are not subject to appeal: on the refusal to register the tax invoice/adjustment calculation in the URTI; on disregarding the data table of the value-added tax payer; on compliance of the value-added tax payer with the taxpayer’s riskiness criteria.

2.3. Documents that the Payer May Add to the Complaint

In case of filing a complaint, the taxpayer has the right to add to the complaint the following:

– in case of refusal to register a tax invoice/adjustment calculation in the URTI – explanations and copies of documents that confirm the information specified in the tax invoice/adjustment calculation, the registration of which has been stopped;

– in case of disregarding the value-added tax payer’s data table – explanations and copies of documents that confirm the information specified in the value-added tax payer’s data table;

– in case of compliance of the value-added tax payer with the taxpayer’s riskiness criteria – information and copies of documents testifying to the non-compliance of the taxpayer with the taxpayer’s riskiness criteria.

2.4. Deadline for Complaint Consideration

Based on the results of the review of the complaint, the central level commission makes one of the following decisions within 10 calendar days from the date of receipt of such a complaint:

– satisfies the complaint and cancels the decision of the regional level commission;

– leaves the complaint unsatisfied and the decision of the regional level commission unchanged.

2.5. Consequences of Satisfaction of Complaints

Satisfaction of the complaint regarding the decision of the regional level commission on the refusal to register the tax invoice/adjustment calculation is the basis for the registration of the tax invoice/adjustment calculation specified in the complaint, if there is a tax amount for which the taxpayer has the right to register tax invoices and/or adjustment calculations in the URTI, calculated in accordance with clause 200¹.3 or 200¹.9 of Article 200¹ of the Tax Code of Ukraine.

Satisfaction of the complaint regarding the decision of the regional level commission to disregard the value-added tax payer’s data table is the basis for reviewing such a tax payer’s data table no later than the next working day after the decision to satisfy the complaint is made.

Satisfaction of the complaint on the decision on the compliance of a value-added tax payer with the taxpayer’s riskiness criteria is the basis for excluding the taxpayer from the list of payers who meet the taxpayer’s riskiness criteria no later than the next business day after the decision to satisfy the complaint.

2.6. New Forms of Complaints and Decisions

The following complaint forms have been approved:

– regarding the decision to refuse to register a tax invoice/adjustment calculation in the Unified Register of Tax Invoices;

– regarding the decision not to take into account the value-added tax payer’s data table;

– regarding the decision on the compliance of the value-added tax payer with the taxpayer’s riskiness criteria.

Forms of decisions based on the results of consideration of the above-mentioned complaints of payers were also approved.

The Resolution will enter into force 30 days following its publication.