Regarding late registration of tax invoice with zero rate

Is a fine applied for late registration of tax invoice with zero rate in the Unified register of tax invoices if it was compiled after 08.02.2023 and according to which rule of law?

Short answer.

In case of violation of terms specified by the Tax Code of Ukraine (hereinafter – Code) for registration in the Unified register of tax invoices compiled for supply of products/services taxed at zero rate, fines are applied in amounts established by Paragraph 120¹.1 Article 120¹ of the Code, namely: fine in the amount of 2 percent of the supply volume (without value added tax), but not more than 1020 UAH.

Full answer.

Relations arising in tax and levy collection are regulated by the Code (Paragraph 1.1 Article 1 of the Code).

Registration terms of tax invoices/ adjustment calculations in the Unified register of tax invoices are determined by Sub-paragraph 201.10 Article 201, Sub-paragraph 89 Sub-section 2 and Sub-paragraph 69.1 Paragraph 69 Sub-section 10 Section XX of the Code.

Liability for violation of terms specified by the Code for registration of tax invoices/adjustment calculations to tax invoices in the Unified register of tax invoices is provided for in Paragraph 120¹.1 Article 120¹ of the Code and Paragraph 90 Sub-section 2 Section XX of the Code.

Paragraph 201.10 Article 201 of the Code stipulates that registration of tax invoices/adjustment calculations in the Unified register of tax invoices must be carried out taking into account the following deadlines:

for tax invoices/adjustment calculations to tax invoices compiled from the 1st to 15th calendar day (inclusively) of a calendar month – until the last day (inclusively) of the calendar month in which they were compiled;

for tax invoices/adjustment calculations to tax invoices compiled from the 16th to the last calendar day (inclusively) of the calendar month – to the 15th calendar day (inclusively) of the calendar month following month in which they were compiled;

for consolidated tax invoices and/or adjustment calculations to such consolidated tax invoices compiled according to operations specified in Paragraph 198.5 Article 198 and Paragraph 199.1 Article 199 of the Code, within 20 calendar days following the last calendar day of month in which they were compiled;

for adjustment calculations made by the supplier of products/services to tax invoice compiled to the recipient – taxpayer, which provide for a reduction in amount of compensation of the value of products/services to their supplier – within 15 calendar days from the date of receipt of such adjustment calculation to tax invoice by the recipient (buyer).

Paragraph 120¹.1 Article 120¹ of the Code stipulates that in case of violation by the VAT payers of deadline provided by Article 201 of the Code for registration of tax invoice and/or adjustment calculation to such tax invoice in the Unified register of tax invoices entails imposition to the VAT payer, who, according to requirements of Articles 192 and 201 of the Code, has obligation in relation to such registration, a fine of 2 percent of the supply volume (without VAT), but not more than 1020 UAH, registering in the Unified register of tax invoices, in particular, tax invoice/adjustment calculation compiled for supply of products/services that are taxed at zero rate.

Law of Ukraine № 2876-IX as of 12.01.2023 "On amendments to Section XX "Transitional Provisions" of the Tax Code of Ukraine regarding renewal of restriction on the stay of gambling business on the simplified taxation system" entered into force starting from 08.02.2023, according to which Paragraphs 89 and 90 were added to Sub-section 2 Section XX of the Code.

Temporarily, during the martial law and six months after month in which martial law will be suspended or canceled, a fine for violation by the VAT payers of deadline provided by Paragraph 89 Sub-section 2 Section XX of the Code for registration of tax invoice and/or adjustments calculation to such tax invoice in the Unified register of tax invoices, is established in amounts determined by Paragraph 90 Sub-section 2 Section XX of the Code:

2 percent of the value added tax amount specified in such tax invoices/adjustment calculations, in case of violation of registration period of up to 15 calendar days;

5 percent of the value added tax amount specified in such tax invoices/adjustment calculations, in case of violation of registration period from 16 to 30 calendar days;

10 percent of the value added tax amount specified in such tax invoices/adjustment calculations, in case of violation of registration period from 31 to 60 calendar days;

15 percent of the value added tax amount specified in such tax invoices/adjustment calculations, in case of violation of registration period from 61 to 365 calendar days;

25 percent of the value added tax amount specified in such tax invoices/adjustment calculations, in case of violation of registration period for 366 calendar days or more.

However, Paragraph 90 Sub-section 2 Section XX of the Code does not determine the corresponding reduced amounts of fines for violation of time limits provided for by Paragraph 89 Sub-section 2 Section XX of the Code for registration of tax invoices in the Unified register of tax invoices, in particular, those compiled for supply of products/services that are taxed at zero rate.

At the same time, changes provided for in Paragraphs 89 and 90 Sub-section 2 Section XX of the Code do not cancel current tax obligation to register tax invoices in the Unified register of tax invoices, which are compiled for supply of products/services for which VAT is not charged (exempt from taxation, taxable at zero rate), defined by Article 201 of the Code, and do not exempt the taxpayer from responsibility for violation of such obligation, defined by Paragraph 120¹.1 Article 120¹ of the Code.

As follows, in case of violation of registration deadlines for tax invoices in the Unified register of tax invoices for supply of products/services that are taxed at zero rate, financial sanctions are applied to the taxpayer who, according to the Code, is obliged to register, is subject to financial sanctions in amounts established by Paragraph 120¹.1 Article 120¹ of the Code, namely: fine in the amount of 2 percent of the supply volume (without VAT), but no more than 1020 UAH.