VAT credit at risk: lack of registration of tax invoice deprives the right to a refund

The issue of VAT tax credit formation remains one of the most sensitive for business. Taxpayers emphasize: the key condition for including VAT amounts in the tax credit is the proper registration of the tax invoice in the Unified State Register.

As explained by the State Tax Service of Ukraine, the absence of the fact of registration of the tax invoice by the seller in the Unified Register automatically deprives the buyer of the right to a tax credit – regardless of whether the seller declared the relevant tax liabilities.

At the same time, the registration of the invoice in itself is a sufficient basis for the formation of a tax credit. Even if the supplier did not reflect the VAT amount in its tax liabilities, this cannot be a basis for depriving the buyer of the right to a credit.

Risks of inspections and fines

Tax authorities also pay attention: any discrepancies between the data of tax reporting and the Unified State Register of Taxes may become grounds for conducting unscheduled documentary inspections of both the seller and the buyer.

In case of violations, the regulatory authority has the right to independently determine the amount of tax liabilities and apply penalties. The amount of the fine can range from 10% to 50% of the amount of additional tax, depending on the nature and repetition of the violation.