VAT liabilities arise before the sale of goods

Автор: admin_dev
VAT liabilities arise before the sale of goods

According to subparagraph 14.1.191 of the Tax Code of Ukraine, the transfer of ownership of a good is its supply.

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The SFS believes that VAT liabilities arise even before the buyer receives the goods

According to subparagraph 14.1.191 of the Tax Code of Ukraine, the transfer of ownership of a good is its supply. Thus, the SFS holds that obtaining ownership of a manufactured good under a contract before its payment and receipt by the buyer should be subject to VAT taxation.

It follows that the emergence of tax liabilities in sales transactions depends on the moment the goods come into existence, not on the date of transfer of ownership. Thus, the term “отгрузка товаров”, mentioned in paragraph 187.1 of the Tax Code of Ukraine, acquires meaning only as the physical movement from the supplier’s storage to the buyer.

Thus, the moment of the emergence of VAT tax liabilities occurs at the start of the transfer of the goods by the supplier to the buyer or to an organization that will deliver them to the final buyer by any means, be it mailing, transportation, etc..

At the same time, the SFS does not equate the date of determination of revenue from its realization with the date of occurrence of tax liabilities in connection with the supply of goods, since revenue is determined based on the date of transfer of ownership of the goods to the buyer.