Paragraph 192.1 Article 192 of the Tax Code of Ukraine № 2755-VI as of 02.12.2010 (hereinafter – Code) stipulates that if any change in the compensation amount for their value is made after supply of products/services, including price revision following supply, recalculation in cases of return of products/services to the person who provided them, or when the supplier returns amount of advance payment for products/services, amount of tax liabilities and tax credit of the supplier and recipient are subject to a corresponding adjustment based on the adjustment calculation to the tax invoice, compiled in manner established for tax invoices and registered in the Unified register of tax invoices.
Adjustment calculation to tax invoice cannot be registered in Unified register of tax invoices later than 1095 calendar days from its compiling date, to which such adjustment calculation is made.
Adjustment calculation made by the supplier of products/services to tax invoice, which is made out to the recipient – taxpayer, is subject to registration in the Unified register of tax invoices, in particular by the recipient (buyer) of products/services, if reduction in the compensation amount for the value of products/services to their supplier is envisaged, for which the supplier sends made adjustment calculation to the recipient.
Sub-paragraph 192.1.1 Paragraph 192.1 Article 192 of the Code stipulates that if as a result of such recalculation there is a reduction in the compensation amount bin favor of the taxpayer – supplier, then:
a) the supplier accordingly reduces amount of tax liabilities based on the results of tax period during which such recalculation was carried out;
b) the recipient accordingly reduces amount of tax credit based on the results of such tax period if such recipient is registered as a tax payer on the date of adjustment and also increased tax credit in connection with the receipt of such products/services.
The supplier has a right to reduce amount of tax liabilities only after registration of adjustment calculation to the tax invoice in the Unified register of tax invoices.
Therefore, in the case of return of products by the buyer, funds for which are not included in payment for another supply of products and will be returned to the buyer, the supplier (seller) on the date of such return of products calculates adjustment to tax invoice compiled on the date of receipt of funds/supply of products. The supplier has a right to reduce tax liability on the basis of such adjustment calculation after its registration in the Unified register of tax invoices by the buyer.
The buyer is obliged to reduce amount of tax credit in the reporting (tax) period in which return of products took place, regardless of registration of such adjustment calculation in the Unified register of tax invoices.
In the case that such funds will not be returned and will be credited to the payment of other products/services that will be supplied in the future, the payer must compile tax invoice for such operation.