Blocked VAT Invoice: When to Write Off Tax Credit as Expenses

• A company asked the tax authorities what to do with VAT from blocked tax invoices that were ultimately refused registration after appeal procedures ended, and when the right to tax credit is permanently lost.
• The case involved invoices blocked in 2022 and finally denied registration in August 2024, leaving the buyer without VAT credit and seeking to treat the amount as an expense.
• The tax authority said corporate income tax is based on accounting rules, but the accounting treatment of such VAT is not set by tax law and falls under the Ministry of Finance/accounting policy rules.
• The article highlights the practical question of whether the blocked VAT can be expensed or added to inventory/asset cost, and in what reporting period, depending on the accounting policy.

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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