Published 27 June 2023. Some rules have changed since; ask us for the current position.
Looking into how VAT works and want compensation from the state? Then you will need to understand every detail of the process. Read on for answers to your questions.
How the process works
A VAT refund (бюджетне відшкодування ПДВ) is compensation from the state: the taxpayer gets back the VAT paid when buying products, work, goods or services. However, not every business can claim it or choose how the money comes back. Today a refund can take one of these forms:
- a cash payment from the state budget;
- an offset: the amount is used to pay off existing tax debt or is carried forward to reduce VAT in the next reporting period.
The process is also affected by the amount of VAT to be refunded, when the business started paying the tax and when it was registered. You have to follow a set procedure: complete the main sections of the VAT return, attach the required appendices, including the budget refund calculation (розрахунок суми бюджетного відшкодування), and file the return with the tax authority. Once the necessary set of documents has been submitted, the business can expect a refund.
As you can see, the process takes time and has its pitfalls. That is why most businesses use VAT refund services from an experienced accountant and get the result without getting into the process. While the specialist handles the issues and represents your interests, you can spend your free time on more enjoyable things, like a walk with your family or a good film. Even if the case goes to court, the specialist will represent and defend your interests until you get the proper result. An offer to solve all your problems without your involvement is hard to turn down!
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