of February 7, 2001 No. (10-13-02/1-690)7
ABOUT THE PROCEDURE FOR APPLICATION OF THE VAT IN CASE OF CHANGE OF THE TAX REGIME OF GOODS (PRODUCTS)
State tax authorities of the republic
The Ministry of Finance, generalizing all earlier these instructions for question of application of the VAT by provision or cancellation of privileges on VAT liability, for the purpose of management in practical work informs the following.
1. Procedure for application of the VAT on the goods (products) which turned from category of free VATes into category liable to VAT.
In case delivery of goods (products) is performed until change of tax regime, and payment after introduction change or on the contrary, then the VAT on these deliveries is not applied.
The VAT is applied only if receipt of payment from buyers and delivery of goods (products) to their address, are performed after changes of tax regime. At the same time, the business entity if is not subject of VAT liability shall be registered in tax body as the payer of the VAT according to requirements of Art. 112 of the Tax code.
With respect thereto, VAT amounts on remaining balance of raw materials, materials, on the incomplete and not sold finished goods (and also on goods purchased) which early according to the current legislation were carried on costs, shall be set off according to requirements of Art. 102 of the Tax code.
In case of calculation of the VAT on remaining balance of incomplete and finished goods it is necessary to divide the cost indicator characterizing the cost of remaining balance into two components:
- containing the VAT;
- not containing the VAT.
From the component of remaining balance containing the VAT, being guided by requirements of Art. 102 of the Tax code, it is necessary to calculate VAT amount.
For this purpose, economic agents shall draw up the act of removal of the specified remaining balance, as of date of change of tax regime.
Product names, goods, materials and raw materials which are in remaining balance quantity and their cost, and also information on the invoices VAT which are written out by suppliers or customs declarations on import shall be reflected in the act.
Based on this act, on remaining balance on which there are invoices VAT or customs declarations in the column "Short Description of Purchases" of the Register of accounting of purchases the entry "the act N _ from _" and in the column "VAT amount" is made the amount which is subject to offsetting is specified.
2. Procedure for application of the VAT on the goods (products) which turned from category liable to VAT into category exempted from the VAT.
In case of implementation of payment or delivery of goods (products) until change of tax regime, the VAT on them it is applied in accordance with general practice.
Exemption of the VAT is applied on the goods (products) delivered and paid since date of change of tax regime.
As well as in the previous case, subjects of the taxation for date of change of tax regime shall draw up the act of removal of remaining balance of raw materials and materials in warehouse, in work in progress and in unrealized finished goods being in remaining balance, and also goods purchased, having specified in it product name, the goods, raw materials and materials which are in remaining balance, quantity and their cost, information on the invoices VAT which are written out by suppliers or about customs declarations on import.
VAT amounts on remaining balance of raw materials, materials and goods which earlier, according to Art. 102 of the Tax code, are carried in offsetting by business entities owed to remove from offsetting.
Based on this act, subjects of the taxation, shall perform entry in the Register of accounting of purchases in the column "Short Description of Purchases" - "the act N _ from _" and in the column "VAT amount" specify with sign "-" VAT amount, early carried in offsetting.
Minister of Finance
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