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VAT refund: who has the right to a VAT refund in 2019

During the consultation on tax optimization our Clients are often interested in the question of a VAT refund.

This is due to the fact that many of them have heard that one of the special aspects of the value added tax is the possibility of its refund to the enterprises out of the budget funds.

We will answer the most popular questions about the possibilities and the procedure for a VAT refund.


Related article: What form of taxation is better to choose for doing business: Single tax

What are the conditions for a VAT refund?

The law provides for the possibility of reimbursing paid VAT to a tax payer.

But there are two mandatory conditions:

  • This is only possible if the tax credit exceeds the tax liability for the tax (reporting) period.

That is, for example, if according to the results of the reporting period, your tax credit is UAH 10,000.00, and your tax liability is UAH 9,000.00, you can expect a reimbursement of UAH 1,000.00.

  • It is possible to receive funds to the company’s account from the state budget only if there is no debt for previous reporting periods.

Related article: Why is it useful to comply with term of appeal against tax violation notification letters?

VAT refund process

If, according to the results of the preparation and submission of reports, you think that you can get reimbursement, you can file an application along with a tax return for the reporting period in which the tax credit exceeds the tax liability.

In the future, the VAT refund process occurs as follows:

1. Your application is entered in the appropriate register and processed in order of priority.

2. Reimbursement of VAT amounts occurs in chronological order and is possible only after the fiscal service has agreed on the amount of reimbursement indicated by you.

Important! Such approval is possible only after a desk audit has been carried out and only if the Fiscal Service does not reveal a discrepancy in the amounts of compensation to the amount that you indicated in the declaration.

3. The work of the Fiscal Service to identify non-conformities.

If a non-conformity  - has been identified, the Fiscal Service shall notify the applicant by appropriate decision.

If a discrepancy  - has not been identified, the Fiscal Service will enter this information into the appropriate Register, and the next day the amount is considered agreed upon.

4. A day later, the amount to be refunded becomes available, and it can be transferred to the account of the VAT payer.

Our lawyers can help you deal with your business taxes in detail, including the VAT refund process.

Related article: Law firm or an in-house lawyer? What are the advantages of legal outsourcing?

Value Added Tax Reimbursement: Is It Easy?

If the Fiscal Service (tax office) agreed on the amount of compensation, you will receive it in your bank account only if you do not have a tax debt.

Otherwise, the amount of tax declared by the payer for compensation, but reduced by the amount of the identified debt, is subject to compensation.

If you want to learn about the procedure for reimbursing VAT for your company, or want to initiate an appeal against the results of a desk audit - get in touch with us!

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