VAT began to reimburse a machine: how it works

Good news for Ukrainian business: yesterday, in the test mode started working outdoor automatic electronic register of reimbursement of value added tax (VAT). This was at a meeting of the Council, said the President of Ukraine Petro Poroshenko. According to him, everyone had access to the registry Gospitalniy service, this means that the order of refund is made, become transparent, up — VAT returns manually, which created problems for the business. However, finanalytica say that the human factor remains, therefore, to talk about the complete victory over corruption yet.

EXPERTS. Is e-registry was opened for three months, but it is expected that in the second half it will start to work in full force. “The problem of VAT refund is one of the more urgent as officials decide who to give the money and who does not, corruption in this area is booming, says economist Ivan Nikitchenko. — There is a percentage of the amount of the VAT (from 10% to 30% and higher), which must be paid in the form of a “bribe tax” to obtain VAT refunds. In the automatic mode of VAT shall be reimbursed without officials, if the applicant complies with all requirements established by law. But the main problems — lack of money in the budget to pay all claimants and the opportunity to intervene in the system “hands”.

Head of the Secretariat of the Council of entrepreneurs under the Cabinet of Ministers Andrei Zablovsky acknowledges that while completely eliminate the control of the staff of GFS for automatic payment of VAT will not work, because there are ways to fool the computer, but the man — no. “Transparent registry make life easier for honest business with a solid reputation, for example, exporters of ore, grain, metal, since the delay someone from officials of the SFS refund of VAT will immediately become public. And officials will have to explain why he suspended the tax refund. In the case of the illegality of his actions it already pulls on criminal article” — told us Zablovsky.

How it works: what is VAT

VAT is value added tax. It operates in most countries in the world — 137-mi 197 mi. In Ukraine, the VAT of the manufacturer is usually equal to 20% of added value, but may be less. For example, the VAT on medicines is equal to 7% on exported goods is 0%. In other countries, the VAT percentage varies from 5% (Japan) to 27% (Hungary). For the consumer, the product automatically becomes more expensive by the VAT amount. Collected from consumers, the money goes to the state budget, but some of them the state should return to producers.

Added value. It’s part of the cost of the product, which is created by any business structure. It is equal to the difference between the value of goods and services produced by the company (i.e. sales) and the cost of goods and services purchased from other businesses is the cost of raw materials, energy. For example, bakery bought 10 thousand UAH of flour and other ingredients, baked bread and sold it for 20 thousand UAH for the price of 10 UAH per loaf, or loaves of 2000. Value added bakery is 10 thousand UAH, or 100%. The shop sold bread at UAH 12 a loaf, earning 24 thousand UAH. The added cost of the store is equal to UAH 4000, or 20%.

What is subject to VAT. This tax levy sale of goods and services (also included in the preferential list, for example, important equipment); free transfer of services, works or goods for which estimated their average market value; performing construction works for own use; import of goods, except those covered by the exemption (e.g., humanitarian aid).

Why you need a VAT. It allows you to avoid multiple taxation of the same value; unlike sales tax, it minimizes the risks of tax evasion, as the evasion of tax by the retailer to the state means loss of the entire amount of the tax; in terms of VAT tax evasion by one party of production and trading chain does not exclude the possibility of obtaining the same amount at a later stage of production (resale).

Consumer. With the price of a loaf of bread 12 UAH/piece in each “sitting” 20% VAT, or 2.4 UAH, which is additionally paid by the buyer. That is for end consumers, VAT is essentially a sales tax. This is one of the main sources of filling the budget at the level of 46-47% of all revenues to the Treasury. In fact, he is paid from the pocket of the consumer, as any manufacturer is forced to raise the price of their goods at least 20% in favor of the state.

Components VAT. This tax consists of tax liabilities and tax credit. Commitment is the total amount of VAT that should be paid by the owner during the reporting period. And a credit amount that a business can reduce the amount of tax. For example: with the proceeds of 20 thousand UAH the bakery must pay VAT 4000 UAH (20%), and store — RS 4800 (20%). But actually they pay less because of the tax credit. Because the price of flour, yeast, electricity has been laid 20% VAT that was previously paid millers, energy, etc. So the bakers pay VAT only UAH 10 000 (UAH 2000), and trade — from 4000 UAH (800 UAH it).

The VAT refund. If the company’s products are sold abroad, the VAT on such goods is more than the amount of the tax credit (for Ukrainian exporters, the VAT is 0%). To reclaim VAT, the company sends to the state fiscal service Declaration, after verification and confirmation of authenticity of which the state returns to the enterprise “excessive” VAT.