Three-party contract: VAT consequences for resident buyer and non-resident payer

• A resident legal entity has entered into a tripartite agreement for the supply of goods to a resident, with a non-resident payer
• The non-resident payer will pay in euros, with 70% of the advance payment, 20% of the advance payment, and the final payment of 10%
• The question of how to calculate VAT in this scenario is raised
• The tax invoice should be made out to the buyer, even if a third party is making the payment
• Accounting for the payment in a foreign currency should be done according to the norms of the National Accounting Standards of Ukraine
• Prepayments should be reflected in the balance sheet at the official exchange rate of the National Bank of Ukraine on the date of receipt
• Income from the advance payment should be recognized at the exchange rate on the date of receipt
• If the first event is the shipment of goods, the economic transaction for the sale of exported goods should be reflected in the accounting at the exchange rate of the National Bank of Ukraine on the date of recognition of income
• Monetary items in a foreign currency on the balance sheet and on the date of the economic transaction will determine exchange differences
• An illustrative numerical example is provided in a table for the accounting treatment of receiving goods paid for by a third party non-resident.

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.

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