Specifics of implementation and VAT taxation of export of certain product types
Law of Ukraine № 3706-IX as of 09.05.2024 "On amendments to the Tax Code of Ukraine and other laws of Ukraine regarding export specifics of certain product types during the martial law" (hereinafter – Law № 3706-IX), which was published on 20.06.2024, established temporarily for a period of the martial law in Ukraine, specifics of implementation and VAT taxation of export of certain product types within the framework of introduction of export security regime.
Law № 3706-IX enters into force on 01.07.2024.
According to the Law № 3706-ХІ, peculiarities of export security regime are regulated by the Law of Ukraine № 959-ХІ as of 16.04.1991 "On foreign economic activity" (hereinafter – Law № 959-ХІ) and the Tax and Customs Codes of Ukraine.
Decision on the introduction of export security regime is adopted by the Cabinet of Ministers of Ukraine after bringing into line and adopting all necessary normative legal acts and ensuring possibility of processing information specified by the Law № 3706-ХХ, Central body of executive power.
During the validity period of export security regime (from the moment of adoption of relevant decision by the Cabinet of Ministers of Ukraine), the VAT taxation of export outside the customs territory of Ukraine under the customs export regime of certain product types is carried out taking into account peculiarities determined by Paragraph 97 Sub-section 2 Section XX of the Tax Code of Ukraine.
Export of certain product types may be carried out only by registered VAT payers. Business entities that are not registered as the VAT payers are prohibited from exporting certain product types during the VAT validity period.
List of products to which export security regime is applied (hereinafter – certain product types) is determined by Clause 2 of Article 192 of the Law № 959-XII. In particular, they include a number of grain and oil crops (wheat, rye, barley, oats, corn, soybeans, rapeseed, sunflower), vegetable oils (sunflower, soybean, rapeseed, mustard) and waste obtained during their production (including h. cake), honey and walnuts.
Exceptions to which relevant requirements for export of certain product types within the framework of introduction of export security regime do not apply are provided for Clauses 10-12 of Article 192 of the Law № 959-XII, namely:
- removal of supplies by commercial vehicles according to Article 229 of the Customs Code of Ukraine;
- export (according to the given list), which are carried out by the VAT payers accompanied by a phytosanitary certificate, issued taking into account provisions of Paragraph 15 Section IX of the Law of Ukraine № 3348-XII as of 30.06.1993 "On plant quarantine".
Product export within the framework of introduction of export security regime is carried out only on the condition that contract (foreign trade) prices provided for in the foreign economic agreement are not lower than the minimum permissible export prices for such products.
Information on the minimum allowable export prices for certain product types is posted on the official website of the Ministry of Agrarian Policy and Food.
Exporting certain product types outside the customs territory of Ukraine under customs export regime of certain product types, the taxpayer is obliged to compile separate tax invoice for each such item and register it in the Unified Register of Tax Invoices before the submission date of customs declaration for customs clearance of such products.
In such tax invoice:
only one product can be indicated under one code according to Ukrainian classification of the foreign activity products;
measurement units of products are indicated in kilograms;
date and number of agreement (contract) for export of certain product types outside the customs territory of Ukraine must be indicated in tax invoice. In tax invoice compiled for product export outside the customs territory of Ukraine on the basis of a forward contract, the corresponding note about the forward contract is indicated.
Tax invoice compiled in violation of such requirements is not accepted for registration in the Unified Register of Tax Invoices.
Taxation of export of certain product types during the validity period of export security regime is carried out at rates determined by Sub-paragraphs "a" and "d" of Paragraph 193.1 Article 193 Section V of the Tax Code of Ukraine for such product supply in the customs territory of Ukraine (20% and 14%, respectively).
Taxpayers whose activities meet criteria established by Sub-paragraph "a" of Sub-paragraph 97.2 Paragraph 97 Sub-section 2 Section XX of the Tax Code of Ukraine apply 0% tax rate compiling tax invoice for export of certain product types during the tax exemption validity period.
In particular, such taxpayers include taxpayers for whom, during the previous 12 calendar months (up to November 11, 2024 - for actual available period, starting from November 11, 2023), amount of unreceived funds for export of certain product types, for which the bank did not complete currency supervision of compliance by such payer with settlement deadlines established by the National Bank of Ukraine (after their expiration), does not exceed 20% of the total amount of export operations outside the customs territory of Ukraine under customs export regime of certain product types for which settlement deadlines established by the National Bank of Ukraine have expired.
Registration of tax invoice in the Unified Register of Tax Invoices compiled for export of certain product types in the validity period of export security regime, regardless of what tax rate is indicated in such tax invoice (0% or 20% or 14%) can be stopped in the Unified Register of Tax Invoices according to procedure and on grounds, determined by the Cabinet of Ministers of Ukraine according to Paragraph 201.16 Article 201 Section V of the Tax Code of Ukraine.
Tax invoice, compiled for export of certain product types during the validity period of export security regime and not registered in the Unified Register of Tax Invoices, does not give the taxpayer opportunity to start customs clearance of such products.
If 30 calendar days have passed since the registration date of tax invoice for export outside the customs territory of Ukraine in customs export regime of certain product types in the Unified Register of Tax Invoices, and no customs declaration for such products has been issued during this period, registration of such tax invoice in the Unified Register of Tax Invoices is canceled.
After compiling tax invoice for export of certain product types during the validity period of export security regime and its registration in the Unified Register of Tax Invoices, adjustment of such tax invoice can be carried out by compiling adjustment calculation only if certain conditions are met and in several stages, namely.
Stage 1
Before the customs declaration, which certifies export of such products outside the customs territory of Ukraine, in case of a change in product quantity or value, adjustment calculation of the first type is made.
Adjustment calculation of the first type can be made both to increase and decrease value and/or quantity of product. At the same time, volume of export for which customs declaration is compiled cannot exceed volume of the same operation specified in tax invoice, taking into account its adjustment.
Adjustment calculation of the first type is subject to registration in the Unified Register of Tax Invoices exclusively before the beginning of customs clearance.
Registration in the Unified Register of Tax Invoices of adjustment calculation of the first type can be stopped in manner and on grounds determined by the Cabinet of Ministers of Ukraine according to Paragraph 201.16 Article 201 Section V of the Tax Code of Ukraine.
Stage 2
After completion of export outside the customs territory of Ukraine in the customs product export regime and submission of all necessary additional declarations for customs clearance according to relevant customs declaration in order to bring indicators of tax invoice into compliance with indicators of customs declaration, adjustment calculation of the second type can be compiled.
At this stage, there is no change in tax rate.
Adjustment calculation of the second type can be compiled only to reduce amount of operation specified in tax invoice.
Adjustment calculation of the second type is subject to registration in the Unified Register of Tax Invoices. If indicators of tax invoice, taking into account adjustment calculation of the second type submitted for registration, do not correspond to indicators of customs declaration – such adjustment calculation will not be registered.
Only one adjustment calculation of the second type can be registered in the Unified Register of Tax Invoices.
Blocking of registration in the Unified Register of Tax Invoices of adjustment calculation of the second type is not carried out.
After registration in the Unified Register of Tax Invoices of adjustment calculation of the second type, adjustment of quantitative and value indicators of tax invoice compiled for export outside the customs territory of Ukraine in customs export regime of certain product types is not allowed.
Stage 3
After completing calculations for export outside the customs territory of Ukraine in customs export regime of certain product types, the bank informs the State Tax Service by sending a corresponding notification.
Notification received from the bank is sent to the taxpayer through the taxpayer's electronic cabinet.
After receiving notification in the electronic cabinet about completion of calculations for the specified export, the taxpayer can change rate and amount of the VAT specified in tax invoice compiled for export outside the customs territory of Ukraine in the customs export regime of certain product types, if in such tax invoice tax rate of 20% or 14% was indicated and the corresponding amount of the VAT was accrued.
Such adjustment is carried out by compiling adjustment calculation of the third type in which only tax rate and accrued amount of tax are subject to adjustment.
Only one adjustment calculation of the third type can be registered in the Unified Register of Tax Invoices.
Blocking of registration in the Unified Register of Tax Invoices of adjustment calculation of the third type is not carried out.
After registration in the Unified Register of Tax Invoices of adjustment calculation of the third type (and for taxpayers who had a right to compile tax invoice with application of 0% rate - adjustment calculation of the second type) it is forbidden to make any changes to tax invoice registered in the Unified Register of Tax Invoices.
Export outside the customs territory of Ukraine under the customs export regime of certain product types are reflected in tax declaration for reporting (tax) period that falls on the issuance date of customs declaration certifying the fact of crossing the customs border of Ukraine, issued according to requirements of customs legislation, regardless of the compiling date of tax invoice for the specified operation.
In case of negative value of amount calculated according to Paragraph 200.1 Article 200 Section V of the Tax Code of Ukraine, due to adjustment of tax liabilities based on Sub-paragraph "c" of Subparagraph 97.4 Paragraph 97 Sub-section 2 Section XX of the Tax Code of Ukraine, such amount is subject to budgetary reimbursement according to Sub-paragraph "b" Paragraph 200.4 Article 200 Section V of the Tax Code of Ukraine.
