The problem issues of VAT deduction to the tax credit when performing import operations by the tax payer on the basis of electronic customs declaration
The new Customs Code of Ukraine and a number of normative acts adopted in pursuance of the Code implement new procedure of electronic declaring of goods imported to the customs territory of Ukraine. Implementation of such procedure implies avoidance of paperwork, what, by the intention of the legislator, must lead to faster and more efficient procedure of customs clearance of goods.
Although electronic declaring of goods implies avoidance of the paper documents, official positions of some of the regulatory authorities hampers the efficiency of this procedure. Thus, currently the issue about the legitimacy of crediting the VAT on the basis of the electronic customs declaration without their paper copies is still in question.
Thus, paragraph 201.12 of the Tax Code of Ukraine stipulates that “in case of goods import to the customs territory of Ukraine the document certifying the right to include amounts of VAT to the credit shall be the customs declaration composed according to the legislation”.
The abovementioned article does not establish the form of declaration and, correspondently, quite logical question arises: does the electronic customs declaration certify the right on VAT credit amounts?
The legal status of electronic documents is determined by Article 7 of the Law of Ukraine “On electronic documents” which establishes that electronic document with the mandatory requisites and electronic signature of the author is deemed to be an original copy. Besides, paragraph 3 of Article 257 of the Customs Code of Ukraine directly envisages that the electronic customs declaration and paper declaration have equal legal force.
Therefore, whether customs declaration is electronic or it is a hard copy the both documents have the equal legal force and it does not make any difference for the tax credit formation. Correspondingly, for proving VAT credit amounts the taxpayer should simply save the electronic customs declaration on data reading devices. In case of tax audit, e-declarations could be displayed for their viewing or printed out in order to present to representatives of tax services. In any case both documents are considered to be originals of the customs declaration according to the current legislation.
Yet, unfortunately, the abovementioned standpoint is not shared by the Sate Tax Service of Ukraine (hereinafter referred to as “STS of Ukraine”). Thus, the STS of Ukraine offered its opinion on this issue in the information letter which states the following:
“The copy of an e-declaration on paper is deemed to be a visual display of electronic customs declaration on paper composed by the customs authority in the *.xps format and certified by the officer of the customs authority in the order prescribed by this subparagraph.
Certification shall be accomplished by putting on the front upper part of every sheet of the copies of customs declaration in paper form or printed on paper e-declaration copy of the inscription “Copy. According to the original”, signature, surname with initials, the date of certification of the copy and personal numbered seal.
Therefore, the abovementioned copies of customs declarations may be considered as the document which is the ground for finalizing currency control over import transactions and proving VAT amount included to tax credit.”
The same response was in the letter on request of the European Business Association.
Thus, the tax officers in spite of electronic procedure of declaring require the taxpayer to have the copy of such declaration in paper form certified by the customs authority. Correspondingly, such a document proves the amounts of VAT included to tax credit of the taxpayer in relation to import transactions.
The standpoint of the State Tax Service taken in the information letter implies that the absence of e-declaration copies certified by the customs authorities during the audit of the taxpayer may result in cancellation of the right to credit VAT amounts and lead to assessment of VAT liabilities. That is why, unfortunately, following the conservative approach the transition to entirely paper-free customs clearance is still impossible.
As we understand, the tax authorities stand on such position because they do not have the access to the filed customs declarations and have no possibility to check the legitimacy of the filed e-declaration and the lawfulness of the tax credit formed on its basis when carrying out import transactions by the tax payer.
Nevertheless, last year the Tax Code of Ukraine was amended due to the implementation of the procedure on electronic customs declaring when performing export transactions. Thus, paragraph 200.8 Article 200 of the Tax Code of Ukraine stipulates the following:
“If customs clearance of goods exported outside of Ukraineis carried out through the e-declaring, such customs e-declaration shall be submitted to the state tax service by the state customs service in electronic form in the order prescribed by the Cabinet of Ministers of Ukraine, following all the requirements on electronic signature registration according to the law”.
The abovementioned norm is also stipulated in paragraph 18 of Chapter 3 of the Rules of VAT reports filling and submitting procedure.
Therefore, it is established by the law that when the export transaction is performed by a taxpayer the tax authorities shall receive the copy of the customs declaration in electronic form. Herewith, the tax payer pretending to the right on VAT refund from the budget when submitting the amount of such refund is not obliged to submit the copy of e-declaration in paper form.
The situation is quite absurd as far as the procedure of submitting of e-declaration copies in electronic form is prescribed by legislation only for export transactions but there is no such procedure for import transactions.
At the same time, settling the issue on closing of currency control over import transactions the Administration of the National Bank of Ukraine amended the Instruction on the Procedure for Exercising Control over Export and Import Transactions. Thus, according to the item 3.3 of the abovementioned Instruction banks close the currency control over import transactions of the residents on the basis of information from the electronic registers of customs declarations. Such registers shall be formed by the customs authorities and submitted to the National Bank of Ukraine which then transfers them to other banks. Therefore, currently the banks do not require the copy of the filed e-declaration in paper form when eliminating control over import transaction.
Therefore, we hope that in the near future the issue on confirmation of tax credit formation by electronic customs declarations will be regulated considering the present experience of e-declarations submission by the customs authorities to the tax authorities when performing export transactions and submission of5 customs declaration registers to the banks for closing currency control.
But before the expected changes will come, we recommend receiving the certified copies of e-declarations and providing their keeping on the enterprise in order to avoid the misunderstanding with the tax officers.
1The Letter of the State Tax Administration № 4066/0/61-12/15-3115 dated November 22, 2012.
2The Letter of the State Tax Administration 8324/0/61-12/15-3115 dated December 12, 2012.
3Amendments of the Law of Ukraine “On Amending the Tax Code and the Customs Code of Ukraine on Adjustment of Their Certain Norms” of June 7, 2012.
4The Procedure approved by the Order of the Ministry of Finance of Ukraine No. 1492 On Approval of the Forms and Procedure of Filling and Submission of VAT Reports of November 25, 2011.
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