In economic and legal relations, a situation is common when value added tax payers refuse to draw up and register a tax invoice in the Unified Register of Tax Invoices and, thus, put the counterparty in a situation where the latter is deprived of the right to a tax credit.
It should be recalled that according to clause 14.1.181. of Article 14 of the Tax Code of Ukraine, a tax credit is the amount by which a value added tax payer has the right to reduce the tax liability of the reporting (tax) period, determined in accordance with Section V of this Code.
According to clause 201.10 of Article 201 of the Tax Code of Ukraine, when carrying out transactions for the supply of goods/services, the taxpayer – the seller of goods/services is obliged to draw up a tax invoice within the established time limits, register it in the Unified Register of Tax Invoices and provide it to the buyer upon his request.
Based on the above, the seller of goods/services is obliged to draw up a tax invoice within the established time limits and register it in the Unified Register of Tax Invoices (hereinafter referred to as the Unified Register of Tax Invoices), which gives rise to a reasonable expectation on the part of the counterparty that this obligation will be fulfilled, since only tax invoices/calculations confirmed by adjustments to such tax invoices registered in the Unified Register of Tax Invoices can tax amounts be included in the tax credit.
Current legislation does not provide for the registration of a tax invoice in the Unified Register of Tax Invoices by the buyer of services. Therefore, the obligation to draw up and register a tax invoice in the Unified Register of Tax Invoices is imposed on the Supplier within the meaning of Article 201 of the Code of Civil Procedure of Ukraine.
So, a logical question arises – how to protect the counterparty’s right to a tax credit if the counterparty acts in bad faith and refuses to draw up and register a tax invoice in the Unified Register of Tax Invoices?
The answer to this question was provided to us by the Grand Chamber of the Supreme Court in its resolution of 05.06.2019 in case No. 908/1568/18, in which it reached the following conclusion: “the seller’s obligation to register a tax invoice is the taxpayer’s obligation in public law relations, and not an obligation to the buyer, although failure to fulfill this obligation may cause the buyer losses. Therefore, the buyer’s claim for the seller’s obligation to carry out such registration is not a method of protection in economic legal relations, and is not subject to consideration in a court of any jurisdiction. Instead, an appropriate method of protection for the Plaintiff may be to apply to the counterparty with a claim for compensation for losses incurred as a result of the counterparty’s violation of the obligation to prepare and register tax invoices under the contract.”
Based on the above, in order to protect the violated right to a tax credit, the counterparty should file a claim against the unscrupulous counterparty for compensation for losses incurred as a result of the counterparty’s violation of the obligation to prepare and register tax invoices.
Attorneys and lawyers of the Law Association “Lex Consulting”, who have many years of experience in protecting and representing clients’ interests in judicial and law enforcement agencies, will help protect your right to a tax credit and help recover from the unscrupulous counterparty the amount of losses incurred for refusing to register tax invoices.
