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“The team was recently visible advising on a number of pharmaceutical cases. Sources agree that the team is “moving in the right direction” and are particularly impressed by its work in the pharmaceutical sector”.

 

Tax refund arrears may cause VAT rate reduction

27.08.2013

Source: «Ekonomichna Pravda»

VAT refund arrears may cause reduction of VAT rate and introduction of turnover tax.
It was stated by Andriy Sydorenko, lawyer of Ilyashev & Partners Law Firm, when commenting on initiative to reduce VAT rate and introduce turnover tax.

«It is unknown whether the situation with VAT refund changes after introduction of turnover tax, but obvious that VAT amounts will decrease due to tax rate reduction», said the expert.

He believes that perhaps introduction of turnover tax will not bring the additional 22 bln U.S. dollars to the budget, if the number of «intermediate» suppliers in the manufacturer to buyer goods supply chain decreases.
«On the other hand, taking into account 71.6 bln U.S. dollars exports and 86.8 bln U.S. dollars imports (in 2012), turnover tax proceeds only from export and import transactions can amount to 19.36 bln hryvnias», noted Sydorenko.

The expert believes that cancellation of allowances will obviously affect tax-exempt consumers of goods due to increase of cost of goods sold.

«Adoption of turnover tax is not essentially illegal, because the applicable taxes in Ukraine are set by the Tax Code. To some extent, we cannot say that turnover tax will result in double taxation of business as taxes will be paid from different taxable items – turnover (income) and profit», concluded the lawyer.

 
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