Specially for Latifundist.com
On January 12, the Verkhovna Rada of Ukraine voted for the changes to the Tax Code of Ukraine aimed at countering the non-receipt of foreign exchange earnings. What are the material changes this draft law is to introduce for the exporters?
From the moment of validity of the relevant Law and up to the end of the martial law of emergency state, a new mode – export provision mode – can be introduced for the export of wheat, barley, corn, soy, rapeseed, sunflower, sunflower oil, and grist.
If a certain item of the goods is subjected to this mode, these goods shall be subject to special export rules. If an exporter has been exporting the goods subject to special export rules during a month within the limit and not violating the currency legislation for the last 12 months, it can carry out with the export operations just like before. No changes shall be made in this case.
Regarding the limit, it is calculated as one third of the cost of the goods exported over the last six months under the customs declarations indicating that the exporter received the payment for the goods in full. It means that either there was an advance payment for the goods, or the banks were prohibited to carry out the currency control over receipt of foreign exchange earnings.
The only thing this exporter is to do is to appeal to the service banks which shall report about this volume of operations to the National Bank of Ukraine, and the latter shall, in turn, provide monthly updates to the customs house regarding this exporter’s limit.
If the cost of the exported goods exceeds the indicated limit, the relevant surplus shall be subject to a specific procedure, namely:
1. To provide a customs declaration, the exporter shall be liable to register a tax bill for these goods in full with the VAT rate for procurement within Ukraine. The rate will total 14 % except for the grist and oils. Registration of such bill cannot be suspended.
2. After that, the exporter shall be entitled to submit a customs declaration and carry on the export operation.
3. In future, the exporter shall be entitled to register the adjustment calculation and change the export goods tax rate to zero only after it receives the full payment for the goods, and the bank stops the control over receipt of foreign exchange earnings, to which effect the bank shall on its own inform the tax inspection in 3 days, and the tax inspection shall notify the exporter in its back office. The tax bodies also cannot suspend the registration of the said adjustment calculation.
4. If after the registration of the relevant adjustment calculation the exporter finds out that the VAT amount is negative, it shall be subject to budget compensation.
5. The changes also encompass a new requirement: a VAT payer shall register the purchase/procurement of the goods to be used in operations subject to the export provision mode.
6. To finally manifest the set algorithm as a valid one, the law prohibits the settlement in any other form than receiving the funds from a non-resident to the accounts of the exporter in Ukraine, such as counter-claim setting or receiving the payment to the account of foreign banks, etc.