The new mandatory requisite of VAT invoice according to the latest amendments in the Tax Code (Legal Alert 2011-3)
On August 6, 2011 the Law of Ukraine “On introduction of amendments to the Tax Code of Ukraine and some other legislative acts of Ukraine concerning improvement of certain provisions of the Tax Code of Ukraine” (hereinafter – “the Law”) came into force. Among the amendments, which the Tax Code underwent according to this Law, it is worth noting amendment of the list of mandatory requisites of VAT invoices.
Such new requisite is the code of goods according to UKT ZED (Ukrainian classification of foreign economic activity goods) for excisable goods and goods, brought to the customs territory of Ukraine. Thus, according to sub-para. (i) of para. 201.1. of Article 201 of the Law “The taxpayer is obliged to give to the consumer (receiver) upon his request signed by the authorized by taxpayer person and sealed VAT invoice which should contain such mandatory requisites…(i) code of goods according to UKT ZED (for excisable goods and goods, imported to the customs territory of Ukraine)”. Thereby, the code is mandatory requisite of VAT invoice in respect of goods, imported to the customs territory of Ukraine, and also excisable goods.
Provisions of the Tax Code do not clearly determine whether such requirement is stipulated only for the first delivery of goods in Ukraine or to the further reselling as well. However, after analyzing the provisions of the Tax Code it is possible to make a conclusion that codes of UKT ZED shall be indicated through all the chain of reselling.
At the same time, it is worth noting that following the aforesaid amendments, the amendments should be introduced to by-laws. In particular, we are talking about amendments to the order of STAU of 21.12.2010 № 969 On approval of form of VAT invoice and of the Procedure of its filling. Such amendments are to envisage the order of actions of VAT payer upon the filling of VAT invoice. Such amendments have not been introduced as yet.
Regardless of this fact, practically the code of goods according to UKT ZED is already a mandatory requisite of VAT invoices, which are drawn during supplies of the excisable goods or goods imported to Ukraine. Therefore currently there are risks which may appear if VAT invoice doesn’t contain the mandatory requirement. Among such risks we would like notice the following.
Firstly, there is a possibility that tax authorities may refuse to accept such VAT invoice for imported or excisable goods if such invoice doesn’t contain the code of UKT ZED, and basing on this fact, may refuse in the right of taxpayer to credit respective input VAT.
The other risk may appear if consumers, on receiving of such invoice, consider that supplier has breached the order of filling, and may submit a complaint on the supplier to the tax authorities. Basing on such complaint the tax authorities may start an extraordinary inspection of such supplier.
To avoid such risks, before this question is finally resolved, we suggest indicating the code of UKT ZED in section 3 “Classification of delivery of goods/ services of supplier” of VAT invoice. We consider that code of UKT ZED shall be appropriate in section 3 as far as code of UKT ZED may be considered as part of the description of goods. In such case VAT invoice will contain code of UKT ZED and tax authorities will not have any formal grounds for challenging this document.
We hope that the abovementioned information is useful for You.
The above commentary presents the general statement for information purposes only and as such may not be practically used in specific cases without professional advice.
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