You are using an outdated browser. Please upgrade your browser to improve your experience.

Systemic problem with processing duplicate tax invoices is resolved 

29.11.2018

Subject of complaint: The State Fiscal Service of Ukraine (SFS)

Complaint in brief: Starting from June 2017, the Council received 12 similar complaints from enterprises from different regions of Ukraine. The subject of complaints was the same: in thesystem fo VAT electronic administration (SEA), for some unknown reasons for complainants, the amount for which they could register tax invoices (the so called “registration limit”) decreased. 

The Council’s investigators started looking into the subject matter of the complaints and found they had one thing in common in all cases. At some point of time all applicants erroneously issued a duplicate tax invoice. The number or date on duplicate tax invoices could be different, but they related to the same transaction. The erroneous tax invoices were finally “cancelled” by taxpayers (with calculation adjustments made up to it), but usually they did it with a delay – in the other reporting period. 

As it turned out, the SAE VAT function, in the event of issuance and subsequent cancellation of the duplicate tax invoice did not work properly. In fact, this cancellation should not have affected the registration limit. However, as far as our complainants were concerned, the tax invoice registration limit was reduced by the canceled invoice amount. For enterprises it meant financial losses. To continue their activities, they often had to add additional funds to their tax accounts. 

Actions taken: The Council’s investigators addressed the SFS with a request to correct the SAE error and adjust the formula on a case-by-case basis. The investigators explained the problem to the fiscal service in writing and proposed troubleshooting options. However, it turned out that to resolve the problem, it was necessary to amend the legislation. In the end, under the auspices of the Ministry of Finance, a working group made up of the Council’s, SFS representatives and other experts was convened to address the issue. The Working Group members jointly analyzed the problem and developed a mechanism for its solution, which included appropriate amendments to legislation. 
 
Result achieved: As a result of eighteen months’ work, a regulation amending the legislation and allowing cancellation of duplicate tax invoices without reducing the registration limit was adopted. These changes will become effective on December 1, 2018. It will allow anyone facing the problem to restore the correct balance of the account and prevent such errors in the work of SEA VAT in future.