Importers of medical equipment can now pay VAT in installments

Tax issues: Other issues Kyiv

Subject of complaint: State Fiscal Service (SFS)
Complaint in brief: On June 16, 2017, the Council received a complaint about actions of the SFS from a leading Ukrainian manufacturer of medical products, when the company was unable to get a postponement of VAT on imported equipment.
On January 1, 2017, amendments to the Tax Code (TC) entered into force that introduced breaks for importers of certain categories of equipment for the production of medical products. They were given the right to pay VAT on the DCV of the equipment not at the time of customs clearance, but in equal installments for up to 36 months.
The Complainant, planning the purchase of preferential equipment in accordance with new rules of the TC, asked the SFS to provide a list of documents required for installment payment of VAT.
However, it appeared that, at the time of filing the complaint, the procedure for allowing taxpayers to pay in installments did not provide for the deferral of VAT when importing equipment into Ukraine. The declared preferences were effectively unavailable to domestic manufacturers.
Actions taken: After thoroughly examining the circumstances of the case, the Council’s investigator sent a letter to the SFS and the Ministry of Finance asking them to work up, agree and submit for Cabinet approval the provisions allowing for VAT to be paid in installments on imported equipment in the preferential categories as quickly as possible.
Result achieved: With the assistance of the Council, the Cabinet of Ministers approved the VAT deferral procedure for importers of the relevant equipment and a system error was successfully fixed.

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