+ Word must be in search result. - Words must not be in search result. * Word start/end on characters before/after symbol. ""Words in quotes will be searched as phrase.

 

Delaying VAT refund by tax audits: is this lawful?

authors: Alexander Minin, Mariia Kozlenko, Artem Shcherbyna

21 April, 2020 Exclusive

Recently the issue of VAT refund gets even hotter for business as indicated by a number of publications on the media and social networks1. According to the statistics of the State Tax Service, as of April 1, 20202, the amount of VAT claimed for refund is over UAH 60 billion, of which UAH 19.8 billion has not been reimbursed.

Particularly recently, we see in practice the efforts of tax authorities to delay refund of the VAT amount, or at least a part of it, including through the conduction of documentary tax audits, which allegedly establish the overstatement of the VAT amounts for refund.

In such cases, the amount cannot be returned within the period of administrative and judicial appeal, which usually takes 1.5-2 years, given the current workload of the courts; corresponding VAT refund is in dispute and only after this the VAT amount shall be returned again to the status “for refund”.

It seems that the balancing of the State budget is not least ensured by transferring the VAT claimed for refund to the category of disputed. By the way, according to the statistics of the State Tax Service, only for March the quantity of declined amounts claimed for refund increased up to UAH 258 million (general quantity of declined amounts is UAH 1,071 billion as of April 01, 2020).

Currently, the only “gap” for conduction of documentary tax audits for the period till May 31, 2020, is unscheduled documentary tax audits on the grounds specified in subpara. 78.1.8 of para. 78.1 of Article 78 of the Tax Code of Ukraine ( “the Tax Code”).

And even before, the corresponding tax audits have been conducted with reference to subpara. 78.1.8 of para. 78.1 of Article 78 of the Tax Code.

The question is, how far this can be resisted and how “legitimate”, at least on the formal side, such actions of tax service should be considered? ...

 

Full text is open only for the subscribers.

Views 894

SIMILAR POSTS

Have you formed a VAT tax credit in relation to the purchase of marketing services? Be ready to answer the questions of the tax authorities about using such services in economic activity. 29 September, 2021    257

The System of Electronic Administration of Fuel Sales – how the “shadow” was tempered 10 September, 2021    1271

How “the state in the smartphone” works with VAT refund as an example 02 September, 2021    235

What changes does the Draft Law No. 5600 propose? 15 July, 2021    4508

Draft law No. 5600 abolishes restrictions on audits of VAT refunds.
And what is the electronical VAT administration system for? (are we going back from the “State in Smartphone” to hands-on control of VAT?)
07 July, 2021    730

Thoughts on the draft law No. 5600: tax lien for non-confirmed liabilities – why is it better for the legislator to give up the idea? 06 July, 2021    603

The balance of interests – R.I.P. (the draft law No. 5600) 05 July, 2021    753

Responsibility for quarantine restrictions: not about 17 000 UAH of fine for citizens, but about responsibility of officials for unlawful restrictions on business and society 13 May, 2020    2345

Taxes and Motivation 29 April, 2020    2079

Does the state make “too many efforts” for economy recovery through changes in taxation (by shortchanging itself?)? 28 April, 2020    607

How to deal with the contractor’s debt expected not to be returned in the tax accounting 27 April, 2020    571

Does (not) the moratorium apply to audits aiming at confirmation of VAT refund? 21 April, 2020    4234

Comment