Tax Code of Ukraine (hereinafter – Code) defines special rules regarding declaration of tax credit in certain cases according to subparagraph "b" of Sub-paragraph 192.1.1 Paragraph 192.1 Article 192 of the Code preparing and registering adjustment calculation made by the supplier of products/services to the tax invoice, compiled for the recipient – taxpayer, which provides for a reduction in the amount of compensation for cost of products/services to their supplier (hereinafter – adjustment calculation for reduction), which is subject to registration in the Unified Register of Tax Invoices by the recipient (buyer).
Recipient (buyer) is obliged to reduce tax credit, regardless of the fact that he/she received adjustment calculation for reduction or the fact of its registration in the Unified Register of Tax Invoices, namely in reporting (tax) period in which, according to Paragraph 192.1 Article 192 of the Code, there were grounds for the seller to compile such adjustment calculation.
Among the taxpayers, it is common to mistakenly reduce tax credit directly during the period of receipt and registration in the Unified Register of Tax Invoices of adjustment calculations, while obligation to reduce tax credit arises in the period of transaction change, namely: return of products/services to the person who provided them, or when returning amount of advance payment for products/services by the supplier.
Such reduction leads to a violation by the recipient – taxpayer of procedure for calculating and paying the VAT tax liabilities.