Tax invoice blocking: the State Tax Service has identified what influences the commission’s decision

The blocking of tax invoices remains one of the most practical challenges for businesses.

On 28 August, during a meeting with businesses, the State Tax Service of Ukraine separately explained what should be taken into account when the registration of VAT invoices and adjustment calculations is suspended.

Key issues include transaction risk criteria, a positive tax compliance history, and the proper completion of the VAT payer’s Data Table.

There is an important point here.

The State Tax Service specifically notes that the Data Table should be accompanied not by a formal explanation, but by information with references to tax returns and other reporting that confirms the nature of the company’s activities.

In other words, for a business, the Data Table should effectively become substantiation of its genuine business activity.

In practice, where tax invoices are blocked systematically, it is not enough simply to submit explanations for each individual VAT invoice.

The following should be analysed:

• why a transaction falls under risk criteria;
• whether the company’s NACE business activity codes correspond to its actual operations;
• what goods and cash flows the State Tax Service sees;
• whether the company has sufficient resources to carry out the declared transactions;
• how the Data Table has been prepared;
• which documents confirm the reality and substance of the business model.

Most importantly, if a company has already been included in the list of high-risk taxpayers, the issue becomes far broader than a single blocked invoice.

Therefore, the strategy should not be limited to unblocking individual VAT invoices. It should also focus on changing the company’s tax profile and eliminating the causes of systematic registration blocking.

This approach makes it possible to stop fighting each subsequent blocked invoice and return the business to normal operations.

Seek legal advice now rather than needing legal representation later.

Author: Maksym Bahniuk, Head of Tax and Customs Law Practice at WINNER Law Firm.

Contact us: info@uk-winner.com | +38 (096) 574 81 02