​Update on the operation of the register for automated VAT refund as per November 3, 2017

11/3/17

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

Since April 1, 2017, the register has received 24,594 refund applications totaling 88.1 billion hryvnas (88,058,844,824 hryvnas); refund applications which have been rejected and/or disputed amount 1.1 billion hryvnas, notifications about the rejection of tax declarations or corrective calculations (art. 49 of the Tax Code of Ukraine) have been sent in regard to applications amounting 16.1 billion hryvnas, 56.7 billion hryvnas (56,691,785,309 hryvnas) have already been refunded, the pending amount is equal to 12.8 billion hryvnas.

In November, 8 applications equal to 1.8 million hryvnas (1,762,177 hryvnas) were captured in the register, refund has not been effected yet. Since the launch of the new VAT refund procedure, the State Treasury Office has refunded 70.2 billion hryvnas (70,247,337,744 hryvnas) including 3.7 billion hryvnas (3,699,777,174 hryvnas) refunded to 134 VAT-payers in the “automated mode”.

Comparative analysis of VAT refund effectiveness

To understand the effectiveness of VAT refund from the state budget, the first months of the operation of the register for refund applications at the level of the Ministry of Finance must be considered. Almost 90% of the amount declared for refund in the respective month are refunded within 30 days.

Thus, 10.5 billion hryvnas were declared for refund in September 2017; as per November 2, 2017, VAT payers received more than 8.8 billion hryvnas. Thus, the refund was equal to approximately 84% of the declared amount.

Just to compare: in September 2016, almost 7.3 billion hryvnas were declared for refund, only 3 billion hryvnas were refunded to applicants as per November 2, 2016, which was only equal to 41% of the declared amount.

Hence, the operation of the new VAT refund procedure demonstrates that business now can rely on VAT refund equal to the declared amounts, which makes it possible to plan business processes in a transparent way.

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