VAT Adjustment for Goods Returned by Legal Successor: No Grounds for Correction

• The question is whether it is possible to adjust VAT payable for goods supplied to a company that has been reorganized.
• The goods are returned not by the legal entity that received them, but by its successor, a new business entity and a new VAT payer.
• There are no grounds for adjusting the supplier’s tax liabilities.
• According to the Civil Code of Ukraine, mergers, acquisitions, divisions, and transformations of legal entities are carried out by decision of their participants or the body of the legal entity authorized to do so by the constituent documents, and in cases provided for by law, by decision of the court or relevant state authorities.
• The Law of Ukraine “On State Registration of Legal Entities, Individual Entrepreneurs and Public Associations” states that in the case of a merger of legal entities, state registration of the newly formed legal entity and state registration of the termination of the legal entities that are terminated as a result of the merger are carried out.
• Termination is considered complete from the date of state registration of the termination of the legal entities that are terminated as a result of the merger.
• In the case of the accession of legal entities, state registration of the termination of the legal entities that are terminated as a result of the accession and state registration of changes to the information contained in the Unified State Register of Legal Entities, Individual Entrepreneurs and Public Associations (hereinafter
• the Unified State Register) regarding the succession of the legal entity to which they are joining are carried out.
• Accession is considered complete from the date of state registration of changes to the information contained in the Unified State Register regarding the succession of the legal entity to which they are joining.
• Since the goods are returned not by the legal entity that received them, but by its successor, a new business entity and a new VAT payer, there are no grounds for adjusting the supplier’s tax liabilities.
• The operation of returning goods by the successor for VAT purposes is considered an operation of supplying goods, which, according to the Tax Code of Ukraine, is subject to VAT.
• As a result of such an operation, the person returning the goods (successor) is obliged to accrue tax liabilities, issue a tax invoice and register it in the Electronic Register of Tax Invoices.

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.

---

---