Consequences of VAT compensation for unpaid goods: implications for the buyer

• Forgiveness of debt for goods means that the buyer does not have to pay for them.
• In the month when the creditor’s debt for such received and unpaid goods/services is written off, the buyer must calculate compensatory VAT.
• According to the Tax Code of Ukraine, a taxpayer is required to issue an electronic tax invoice using a qualified electronic signature or an enhanced electronic signature and register it in the Unified Register of Tax Invoices.
• If there is any change in the compensation amount for goods/services after their supply, the tax obligations and tax credits of the supplier and recipient should be adjusted accordingly.
• The tax credit for a reporting period is determined based on the contractual value of goods/services and includes the taxes paid by the taxpayer during that period.
• The tax credit is calculated regardless of whether the goods/services and fixed assets have been used in taxable operations during the reporting period.
• Tax invoices received from the Unified Register of Tax Invoices serve as a basis for calculating the tax amounts that are part of the tax credit.
• A taxpayer is required to calculate tax liabilities based on the taxable base determined according to the Tax Code and register a consolidated tax invoice for goods/services and fixed assets purchased/manufactured with VAT.

Source: news.dtkt.ua

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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