Draft Law of Ukraine

"On Amendment of the Law of Ukraine "On Value Added Tax"

The draft suggests creating a special account for value added tax, which will be opened by each payer of value added tax in banking institutions, where their current accounts are opened, for the purpose of making settlements on this tax. The taxpayer may personally decide that funds, which are on the special account for value added tax, may be used for settlements on other taxes, duties, mandatory payments.

The special account for value added tax shall receive funds from:

• other accounts of the taxpayer;
• the special account for value added tax of another taxpayer;
• the respective account of a territorial body of the State Treasury according to the procedure for budget compensation.

Funds from the special account for value added tax will be used for the following transactions:

• transferring sums of value added tax to the special account for value added tax of another taxpayer. These transactions shall be performed upon instruction of the owner of the account or a person authorized thereby;
• paying taxes, duties, other obligatory payments to the state and local budgets and other off-budget funds. These transactions shall be performed upon instruction of the owner of the account or a person authorized thereby, as well as upon instruction of bodies exercising control over collection of taxes.

Export compensation of value added tax to payers, whose percentage of tax credit is fully formed from sums of funds, which were actually transferred from the special account for value added tax of such taxpayer to special accounts for value added tax of other taxpayers, shall be performed taking into account the following:

• the ground for performing export compensation is calculation of export compensation of a payer of value added tax over the reporting period and a certificate on movement of funds at their special account for value added tax, which is issued by the bank, where such account is opened;
• for obtaining export compensation the payer shall turn with a written application in free form to a respective territorial body of the State Treasury. The application shall include a copy of calculation of export compensation, verified by the taxpayer's seal, and an original of the certificate on movement of funds at the special account for value added tax verified by signatures of two responsible officials from the banking institution and its round seal.

The draft aims at systemizing financial flows at the expense of separating value added tax from the general amount of funds circulating at the taxpayer's accounts.