What is procedure for renewing rules of accrual and payment of the VAT for taxpayers who chose the single tax at 2 percent income rate after an end of the martial law?Chapter: News
VAT payer in tax reporting for the first reporting period after an end of the martial law, state of emergency, pursuant to Paragraph 198.5 Article 198 the Tax Code of Ukraine as of 02.12.2010 № 2755-VI with changes and amendments (hereinafter – TCU), must accrue tax liabilities on the value of goods, services, non-current assets used in operations that are not subject to taxation (realized during the martial law, state of emergency) and amount of tax included in tax credit on the date of transition to simplified taxation system at 2 percent rate:
for goods / services – basing on the purchasing cost of such goods, services,
for non-current assets that are actually used (sold) during the stay of such payer on the simplified taxation system at 2 percent income rate – basing on the book (residual) value as of the beginning of reporting (tax) period during which such operations are carried out.
Such operations must be reflected in relevant lines (line 4) “Accrued tax liabilities according to Paragraph 198.5 Article 198 and Paragraph 199.1 Article 199 of the Tax Code of Ukraine for taxable operations” of the VAT declaration.
Accordingly, the taxpayer is obliged to compile not later than the last day of the first reporting period after an end of the martial law, state of emergency and register consolidated tax invoice for such goods / services / non-current assets in the Unified Register of Tax Invoices.
For example: martial law, state of emergency ends in June 2022, the payer for the first reporting tax period in July 2022 submits declaration in which he / she accrues tax liabilities on goods sold during application of the single tax at 2 percent income rate and for which on the date of transition to the simplified taxation system (as of April 1, 2022) the VAT amounts were included in tax credit (Paragraph 198.5 Article 198 and Sub-paragraph 9.5 Paragraph 9 Sub-section 8 Section XX “Transitional Provisions” of the TCU).
Given the envisaged by Sub-paragraph 9.9 Paragraph 9 Sub-section 8 Section XX “Transitional Provisions” of the TCU procedure for automatic renewal of rules of accrual and payment of the VAT after an end of the martial law, the VAT payer retains a right to use the VAT amounts included (subject to inclusion) in tax credit on the basis of tax invoices registered in the Unified Register of Tax Invoices on the date of transition to the simplified system at 2 percent rate for goods / services not sold during the martial law during calculation of the VAT liabilities in tax reporting for the first reporting period after an end of the martial law, state of emergency and subsequent reporting periods.
That is, the data of line 21 of the VAT declaration for the last reporting period before transition to the simplified taxation system must be transferred to line 16.1 “Negative value of line 21 of the previous reporting (tax) period” for the first reporting period after an end of the martial law.
According to procedure for filling in the VAT declaration, amount of tax credit for the first reporting (tax) period after an end of declaration martial law, formed by value of line 16.1 during calculation of tax liabilities pursuant to Paragraph 200.1 Article 200 TCU, will reduce amount of accrued tax liabilities in line 4 of the VAT declaration according to Paragraph 198.5 Article 198 of the TCU.
More information is in the “Knowledge Base” of public information and reference resource