Businesses to simplify VAT reporting: bill passes first reading

The Verkhovna Rada on October 13 adopted in first reading draft law No. 16037-d, which provides for simplification of value-added tax (VAT) administration. The document proposes to automate the filing of tax reports, change the rules for inspections and give entrepreneurs more opportunities in choosing the reporting period.

This was reported by the press service of the Verkhovna Rada of Ukraine. The bill was supported by 264 MPs.

One of the key innovations is the possibility of automatic pre-filling of VAT declarations and tax invoices. For this, information already contained in the electronic systems of the State Tax Service will be used.

The corresponding functionality is planned to be implemented in the electronic cabinet of the taxpayer. The procedure and scope of automatic pre-filling of documents will be determined by the Ministry of Finance.

The bill also provides for several other changes:

• Quarterly reporting for sole proprietors. Individual entrepreneurs registered as VAT payers will be able to independently choose a monthly or quarterly reporting period.
• Increase of the threshold for tax audits. The amount of budget refund or negative VAT value, the declaration of which is grounds for an unscheduled documentary audit, is proposed to be increased from 100 thousand to 1 million hryvnias. Other legal grounds for inspections remain a separate issue.
• Simplification of issuance of tax invoices. VAT payers will have the right to draw up consolidated tax invoices by the last day of the month for transactions with buyers who are not VAT payers, including in the case of receiving advance payment.

In addition, it is proposed to improve the temporary mechanism that encourages taxpayers to voluntarily pay tax liabilities assessed as a result of documentary audits during martial law.

As previously reported by the Ministry of Finance, draft law No. 16037-d was prepared on the basis of a government initiative to improve VAT administration. Its consideration is related to the fulfillment of Ukraine's international obligations to the European Union and the International Monetary Fund.

The Ministry of Finance emphasized that the adoption of these amendments is one of the key conditions for Ukraine to receive macro-financial assistance from international partners.

Currently, the new rules are not yet in effect. The Verkhovna Rada supported the document only in the first reading. To enter into force, it must undergo further legislative procedure, including the final vote in parliament, signing by the president and official publication.

According to materials: Verkhovna Rada of Ukraine, Ministry of Finance of Ukraine, Card of draft law No. 16037-d.