Draft Law of Ukraine

“On Amendment of the Law of Ukraine “On Value Added Tax”

According to this draft law, cash method is to be used to pay value added tax.

Pursuant to this draft, the date when tax obligation arises from a sale of goods (works, services) is the date of depositing buyer’s (customer’s) funds into the bank account of a taxpayer as payment for the purchased goods (works, services). If goods (works, services) are sold for cash, the date of arisen tax liabilities is the date the relevant entries are made in a taxpayer ledger-book. If there isn’t any – the date of cash collection in the banking institution that serves a taxpayer.

It should be mentioned that according to the current version of the Law “On Value Added Tax”, the date when a tax obligation resulting from sale of goods (works, services) is considered arisen is the date that coincides with the tax period within which one of the following events was prior: the date of depositing buyer’s (customer’s) funds into the taxpayer’s bank account or the date the goods were shipped, in the event where works (services) are involved – the date on which the relevant documents were issued to evidence the fact that works (services ) were executed by a taxpayer.

Adoption of such draft law will facilitate resolution of such problem as depriving enterprises of their circulating assets in the process of value added tax payment.