Vat tax return
I. Tax period and VAT refund procedure
According to the Value Added Tax Act – VAT Act – the declaration of the obligations or receivables of the persons obliged by law is done on a monthly basis by submitting a monthly VAT return. According to Article 88 of the VAT Act, the result for the tax period is the difference between the total amount of tax due by the person for this tax period and the total amount of the tax credit for which the right to deduct is exercised during this tax period. When the accrued tax exceeds the tax credit, the difference is a result for the period – import tax and, respectively, when the tax credit exceeds the accrued tax, the difference is a result for the period – refund tax. The registered person determines only the result for each tax period – tax to be paid into the state budget or tax to be refunded from the state budget.
The right to a VAT refund is regulated in Art. 92 of the VAT Act. According to it, the right to a refund arises for that person who, within three consecutive months after the last paid VAT liability, has declared in his monthly VAT returns more VAT on purchases / more expenses / than he has charged VAT on income. By the 14th day of the month following the quarterly period in the monthly reference-declaration under the VAT Act the calculated VAT for refund is declared. A tax refund procedure is launched, and there are two types of procedures – inspection or revision.
II. VAT refund period.
In cases where the VAT refund is made through an inspection procedure, VAT is refunded within 30 days from the submission of the last reference-declaration and after deduction of any other due and unpaid public debts of the registered person.
In cases where the VAT refund is carried out through a revision procedure, the refund period is 3 months, with the possibility of extension by the NRA if necessary to clarify the additional facts and circumstances. The revision procedure is usually initiated for larger refund amounts when the refund is made for the first time and / or in cases of inaccuracies or unclear nature of the VAT refund declared.
Reimbursement is made through the issuance of an Act for set-off and recovery (APR) after the completion of the inspection or revision procedure.
III. Accelerated recovery
There is a regulated procedure under the so-called “Accelerated” VAT refund on a monthly basis under certain conditions. According to Art. 92, para. 3 of the VAT Act, regardless of para. 1, the refund tax for each month shall be refunded within 30 days from the submission of each monthly reference-declaration, when:
- The person has made for the last 12 months before the current month taxable supplies at zero rate at a total value of more than 30 percent of the total value of all taxable supplies made by him, including supplies at zero rate. Zero-rate supplies shall also be treated as supplies of the following services with a place of performance in the territory of another Member State, for which the recipient is a person registered for VAT purposes in another Member State:
– transport of goods within the European Union and forwarding, courier and postal services provided in connection with this transport, other than the exempted services, the services under Art. 49 of the law;
– transport processing of goods;
– transport services provided by agents, brokers and other intermediaries, acting in the name and on behalf of another person, as well as valuation services, expertise and work on movables;
- (effective from 01.01.2014) the person – agricultural producer, has made for the last 12 months before the current month taxable supplies at a rate of 20 per cent of the goods produced by him under Annex № 2, part two, at a total value of more than 50 per cent of the total value of all taxable supplies.
IV. For VAT deregistration
Completion of a procedure for deduction of a tax credit upon deregistration under the VAT Act, when as of the date of deregistration the person is in a procedure for deduction under Art. 92, para. 1 of the law, it is considered that as of this date the two one-month periods have expired and the person shall indicate in box 80 of the reference-declaration for the last tax period the remainder of the refund tax after the deduction made so far.
V. Interest due
For non-refunded tax without grounds (the tax, which as a result of the audit was found to be refundable), legal interest is due by the NRA.
VI. Missed VAT refund procedure
Taxpayers have the right to start an additional procedure for VAT refund when they have failed to declare the refund tax in the monthly VAT return.