Draft Law of Ukraine

"On Amendment of the Law of Ukraine "On Value Added Tax"
(on Providing Precise Definition to the Concept of the Date of Shipping Export Production)"

The draft suggests introducing additions to sub-clause 7.3.1 of clause 7.3 of Article 7 of the Law of Ukraine "On Value Added Tax". Such additions are related to providing precise definition to the date when the exporting VAT payer gains tax liabilities in case of exporting goods.

Currently, the Law of Ukraine "On Value Added Tax" establishes that the date of commencement of tax liabilities is:

• either the date of transferring funds from the buyer (customer) to the bank account of the taxpayer;
• or the date of shipping goods; for works (services) – the date of drawing up a document signifying the fact of performing works (providing services) by the taxpayer.

Thus, for cases when the date of commencement of tax liabilities is determined by the date of shipping goods, the current legislation does not provide precise definition what exactly is to be understood under the date of shipping.

The draft determines that the date of shipping in export of goods is the date of their actual crossing over Ukraine's border (the date of actual drawing up of a cargo-customs declaration).

The draft, if approved, will permit eliminating possible ambiguous interpretation of some norms of the current legislation on value added tax.