Changes are not always easy, or a few words about 14% VAT on agricultural products. Article by Vyacheslav Bachylo for LIGA. Blogs
Recently on all news sites drowned News that President Zelensky signed a law on a decrease in VAT rates for agrarians to 14% (Law of Ukraine “On Amendments to the Tax Code of Ukraine regarding the rate. Added tax on supplies of certain types of agricultural products “No. 1115-IX from 17.12.2020.). Reducing tax rates is not a frequent event for Ukrainian tax legislation. But even this seems a positive event, brought a lot of temporary troubles for agribusiness. About these and other nuances associated with changes to tell you below.
less price: myth or reality
In the explanatory note to the draft law, the authors indicated that its norms are aimed at reducing the tax burden on the agricultural sector, and, accordingly, washing the working capital in agricultural enterprises.
The concept of the draft law laid down a decrease in the cost of agro-products at least 6%. Will it take time so in the future. However, today providers of agro-products make changes to VAT rates without changing the total cost of agricultural products. That is, in fact, the margin of suppliers increases, and buyers – will increase the cost of production.
Turbine – our all
The purpose of the bill was to prepare the proper legislative framework for the next sowing season. This is evidenced in particular that the Verkhovna Rada voted for this law in the second reading even in December 2020. But, signed by the Chairman of the Verkhovna Rada and the President, was traditionally after “after the holidays”.
Yes, according to the idea of the authors, the law enters into force on the day following its publication, and applies to tax periods, starting from the first month following the month of publication of this law . That is, in the case of publication of the law at the beginning or at least in the middle of the month in all state bodies (the Ministry of Finance, DPS) and the taxpayers themselves could have been time to coordinate problem issues and amendments to the relevant sales and sale agreements, forms of tax reporting and tax invoices. But, published the law was 02.02.2021, and therefore its rules began to operate from March of the month, actually almost immediately after the weekend.
Despite the fact that in the information space since 2020, from time to time recalled the initiative to reduce the rate, the entry into force of the law was as “snow on the head” for both state bodies and for the state bodies and for subjects of the agricultural sector.
Tax “problems” of the transition period
You can not change
Change in VAT rates has drawn a number of issues to taxpayers. In particular, an acute problem is the issue of previous payment received before 01.03.2020., Which is compiled by tax invoices at a rate of VAT 20%.