Update on the operation of the register for automated VAT refund – October 5, 2017

10/5/17

Since April 1, 2017, the system for automated VAT refund has been operating successfully. Companies now can plan their expenses and processes and rely on regular VAT refund.

Since April 1, 2017, 20,965 refund applications have been submitted to the register amounting 74.8 billion hryvnas (74 763 272 310 hryvnas). Refund applications for which VAT refund has been denied/disputed amount 717.7 million hryvnas, tax declarations or corrective calculations (as per article 49 of the Tax Code of Ukraine) amounting 14 billion hryvnas have been rejected, 47.2 billion hryvnas (47 166 770 410 hryvnas) have already been refunded, the remaining pending amount is equal 10.9 billion hryvnas (including pending amounts for applications submitted in April – 11.4 million hryvnas, May – 1.1 million hryvnas, June – 11.1 million hryvnas, July – 9.2 million hryvnas, August – 801.4 million hryvnas, September – 10.1 billion hryvnas).


In October, 15 refund applications have been submitted so far amounting 3.9 million hryvnas (3 917 759 hryvnas), no VAT refund has been made on them yet.
Since the launch of the new VAT refund procedure, 60.7 billion hryvnas have been refunded to business by the State Treasury (60 705 810 787 hryvnas) including 3.7 billion hryvnas (3 699 777 174 hryvnas) submitted to 141 tax payers in the “automatic mode”.

Comparative efficiency analysis of VAT refund

To understand the effectiveness of VAT refund from the state budget, it is important to look into the first three months of the VAT refund system (register) operation at the level of the Ministry of Finance. Almost 90% of the amounts claimed each month are refunded within 30 days.

• In August 2017, refund applications amounted 10.6 billion hryvnas; as per October 3, 2017, 9.2 billion hryvnas of this amount had been refunded to the applicants. Thus, the refund rate for August 2017 was equal to 88%.
• For the same period of the previous year (August 2016), 7.6 billion hryvnas were claimed for refund. As per October 3, 2016, only 3.6 billion hryvnas had been refunded to the applicants. Thus, the refund rate was only equal to 50% of the claimed amount.

Hence, the operation of the new VAT refund procedure has demonstrated that it enables companies to receive VAT refund according to the claimed amounts and thus to plan their business processes in a transparent way.

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