- When goods/services are used in both taxable and non-taxable operations, the procedure for forming VAT credit is set by Article 199 of the Tax Code of Ukraine (TCU).
- Taxpayers must calculate the proportion of goods/services used in taxable operations based on the previous year’s supply volumes and apply this percentage throughout the current year.
- At year-end, taxpayers recalculate the actual proportion and adjust VAT obligations accordingly, reflecting results in the annual tax declaration.
- Certain operations are exempt from Article 199 TCU rules, including those specified in subparagraphs 196.1.7, 197.1.28, 197.11, 197.24, and some VAT-exempt transactions under transitional provisions.
- For VAT-exempt operations not subject to Article 199, the mechanism is similar to zero-rate VAT: such operations are conducted without VAT accrual but with the right to VAT credit on purchases used in these operations.
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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