Can the seller reduce VAT when writing off accounts receivable? (Ukraine)

• The seller does not have the right to adjust the amount of VAT when writing off a debtor’s debt if the buyer has not returned the goods/services previously supplied and payment has not been received for them within the statute of limitations period.
• According to the Tax Code of Ukraine, the date of occurrence of tax obligations for the supply of goods/services is considered to be the date that falls within the tax period in which any of the events occurred earlier.
• These events include the date of receipt of funds from the buyer/customer to the taxpayer’s bank account as payment for the goods/services, the date of cash receipt in the taxpayer’s cash register, or the date of cash collection in a bank institution if there is no cash register.
• Therefore, tax obligations for VAT arise for the seller on the date of shipment of goods/services.
• Regardless of whether the procedure for pre-trial settlement of doubtful debt has been conducted or not, the seller does not have legislative grounds to adjust the amount of VAT obligations when writing off a debtor’s debt.

Source: news.dtkt.ua

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

---

---