On April 1, the Minister of Finance launched the electronic register for VAT refund. Now, the register is being filled with relevant data. According to the legislation (Decree of the Cabinet of Ministers No. 26 “On the Approval of the Procedure for the Operation of the Register of Applications for VAT Refund from the State Budget”), it will be open for use starting from the first working day of April (which is April 3). From now on, every company will be able to check the status of its VAT refund.
What’s it about?
In the end of 2016, the anti-corruption law No. 1797 was adopted which had been prepared jointly by the MPs, business and the public. The Ministry of Finance is now actively working to implement it. One of the most important steps in this process is the launch of the electronic register for VAT refund. The Ministry of Finance is well aware that the untransparent VAT refund system is one of the key issues regarding tax administration and is consistently implementing changes aimed to improve it.
How the new register will be operating:
All entry data which are to be captured in the register shall be prepared by the State Fiscal Service based on applications from businesses. It shall also verify these data with an electronic signature. Afterwards, the State Fiscal Service shall insert these data into the register. Starting from this point, the refund shall be settled within 30 days (60 days in some cases stipulated by law), the transfer shall be effected automatically on the next day after the expiry of this period.
The VAT is refunded in the chronological sequence (the applicant who is the first to have posted her/his application, is the first one to receive the refund taking into account all other requirements) and on daily basis. The VAT used to be refunded in the last 5 days of the month. That made financial planning extremely difficult for business. Now, the VAT shall be refunded on any day of the respective month, once the refund amount has been agreed. This scheme helps business plan its activities better and supplies it with additional funds starting from the 10th days of each month.
What is the benefit?
The transparent and automated register removes corruption from the VAT refund process, restores the trust of business, creates equal conditions for all companies and makes business in Ukraine easier.