On 16 October 2014, the Cabinet of Ministers of Ukraine adopted a new regulation (the “Regulation”) that defines the order of electronic administration of value added tax (“VAT”) in Ukraine through specially designated bank accounts (“VAT Accounts”).
The Regulation sets out, in particular, the following:
- VAT Accounts shall be opened automatically with the State Treasury Service of Ukraine (“STSU”) immediately after the VAT registration of a VAT payer. VAT Accounts for existing VAT payers shall be opened by the STSU by 25 December 2014;
- under the new system a VAT payer shall be authorised to issue VAT invoices only with respect to the maximum VAT amount that they incur after 1 January 2015 (the “VAT Maximum Amount”);
- the State Fiscal Service of Ukraine shall calculate the VAT Maximum Amount for each VAT payer individually;
- any VAT amounts that were incurred before 1 January 2015 shall not be incorporated into the VAT Maximum Amount. However, a VAT payer will still be able to set such VAT amounts off against its current VAT liabilities; and
- if a VAT Account is closed, then all money available on it will be transferred to the National Budget of Ukraine by operation of law.
The Regulation shall become effective as of 1 January 2015.
Legislation: Resolution of the Cabinet of Ministers of Ukraine No. 569 dated 16 October 2014 “On Particular Questions of Electronic Administration of Value Added Tax”