Assistance with VAT refund

Get an attorney’s advice

Ukraine has an electronic registry for VAT refunds. This makes it easier to refund money from the budget. Still, it doesn’t help to eliminate all the problems which results in refusals. Some people get the refusals because of mistakes in tax reporting, but more often, because of formalism, corruption and legal conflicts. We will tell you about the reasons for these refusals and how to refund VAT in practice.

Theory

In theory, it is easy to receive a VAT refund. You should attach your application for VAT refund to a tax return and submit them to a tax office. The enterprise is then registered in a waiting list of the integrated VAT refund registry. In the meantime, the tax office is conducting an in-house tax audit and, if everything is in place, issues a permit for the refund. If the treasury has enough funds, the enterprise automatically receives the payment. This process takes from one to three months.

Practice

“The best-laid plans of mice and men oft go astray”. This phrase best describes the situation with VAT refunds in Ukraine.

In-house audit. A mandatory condition for getting a VAT refund is an in-house audit. This means checking all the tax documents of the enterprise. Usually, it takes one to three months to perform it. During this time, the tax officers must make sure that the company is not bankrupt, pays taxes on a regular basis and “plays fair”.

This is justified: VAT refund process provides a fertile ground for fraudulent schemes, and the state should make sure that you are an honest businessman. But every coin has two sides – the audits are often used to boost sabotage.

Delays. The tax office may play tricks: pick your documents to pieces, doubt the legal status of your transactions, or cross-check counterparties. These things drag out the terms of verification process and narrow the chances of getting a refund.

Corruption. Despite the fact that the VAT refund registry is totally automated, a person can interfere with its work. There is nothing wrong about it, because tricking a machine is much easier than tricking a person. On the other hand, a person is much easier to bribe and ask to make a VAT refund out of order. We have seen cases when an absolutely honest company was waiting for a refund for 1 year, while companies behind it on a waiting list had received money much earlier.

There are many more nuances that we will not dwell upon here which result in significant delays of the VAT refund process and lead to unreasonable refusals. You will have to a get an attorney if you have come across any of them.

Attorney’s assistance

We have assisted our customers in getting VAT refunds for a total amount of more than UAH 150 million. Some of these cases were so intricate that no one wanted to take them. Still, we have managed to successfully deal with them all.

We recommend engaging attorneys right from the stage of filing a declaration. Then we can conduct an audit and indicate weak points, and also check if you have filled in the declaration correctly.

Further, we assist you through the in-house audit process, consult on tax inquiries, compose explanations for the inquiries, collect and submit documents, compile objections. We provide support throughout the whole process up to the final decision.

If the decision does not meet our expectations, we file a complaint with a higher tax authority or with a court of appropriate authorities. We also apply for a reimbursement of interest for a delayed payment and a reimbursement of court costs at the expense of the tax office.

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