Registration as a VAT payer

The provisions of the Tax Code updated as of January 1, 2014 have significantly simplified the conditions and process of VAT registration. The VAT registration certificate as such is no longer a required document, and neither the counterparty nor the State Tax Service authorities have the right to request it, as the fact of registration as a VAT payer is confirmed by checking the availability of information on the official website of the Ministry of Revenue and Duties (para. 183.13 of Article 183 of the Tax Code). At the same time, business entities may obtain an extract from the register of VAT payers to confirm their status as a VAT payer.

Unfortunately, it is not uncommon for companies to be deprived of the right to a VAT tax credit on the basis of cooperation with "dubious" counterparties, so it is understandable that entrepreneurs want to see their counterparties as VAT payers as well.Every VAT payer who meets the requirements of clause 200.19 of Article 200 of the TCU is entitled to an automatic refund of VAT within three days from the accounts of the State Treasury to their account (clause 200.18.2 of Article 200 of the TCU). Automatic VAT refunds increase the efficiency of VAT administration and eliminate the possibility of fraud, while taxpayers are able to quickly replenish working capital to use it for business development.

The single percentage surcharge on national VAT accounts for the majority of the EU budget, so the functioning of this tax is mandatory in its member states. In order to find out whether you need to register as a VAT payer, you need to understand the grounds for acquiring the status and its benefits. 

According to the VAT payer status, all business entities can be divided into:

• already registered payers;
• those who do not have to or do not want to register;
• those who must register on a mandatory basis;
• those who are not obliged to register, but have the right to do so;
• those who want to become a taxpayer but are not eligible to do so.

It is also possible for a business entity to switch from the simplified taxation system (single tax) to the general taxation system, and it may register as a VAT payer either mandatorily or voluntarily.

Today, the restrictions for voluntary VAT registration have been significantly reduced, except for one - the company must conduct taxable transactions.

Documents required to be submitted to the State Tax Service to obtain the status of a VAT payer:

• application;

Registration as a VAT payer, whether voluntary or mandatory, is not an easy procedure, as the VAT payer status does significantly expand the range of possible counterparties due to the possibility to cooperate with other VAT payers.

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