The Ministry of Finance reports about the operation of the system suspending risky tax bills

On July 1, 2017, the regulation of the Law No. 1797 entered into force which stipulates the blocking of tax bills in the United Tax Bills Register of the State Fiscal Service. The new system which automatically suspends the registration of risky tax bills will make it possible to detect corruption schemes with VAT refund and to prevent losses to the state budget resulting from VAT refund for fake tax bills amounting billions of hryvnas. This system poses a powerful tool to fight corruption.
As per July 11, 2017, 3.695.078 tax bills were registered in the United Tax Bills Register. So far, the registration of 40.206 tax bills has been suspended, which is equal to only 1.1% of their total number.

The registration of tax bills in this period was suspended on the basis of two criteria:

1) “mix up” of goods, i.e. discrepancies in the amount of goods or missing documents confirming the purchase of goods;
2) missing licenses entitling companies to manufacture, to export or to import excise goods as well as their to sell them in wholesale or retail.

What to do, if the registration of a tax bill is suspended?

Validation of the respective risk criteria and suspension of the registration of a tax bill do not mean that the registration of a tax bill has been blocked. A taxpayer has 365 days to submit documents to the State Fiscal Service proving the validity of the respective transaction (the list of required proving documents has already been adopted). Within 5 days upon receipt of the proving documents, the central commission of the State Fiscal Service shall decide about the registration/non-registration of the tax bill in question.

If the State Fiscal Service denies the registration of a tax bill, a taxpayer can challenge this decision and submit a claim (according to the Procedure for the processing of claims against decisions of the State Fiscal Service about the denial of the registration of tax bills/corrective calculations in the United Tax Bills Register) within 10 days following the commission’s decision to suspend registration.

The Ministry of Finance will continue to inform taxpayers about the situation regarding the blocking of tax bills.