The Cabinet changed the procedure for blocking tax invoices and adjustment calculations – what was adopted

New Approaches to Blocking: The Beginning of Reform
In August 2025, the Cabinet adopted Resolution No. 1048, which radically revised the mechanism for blocking tax invoices (TI) and adjustment calculations (AC). The main goal is to reduce bureaucratic pressure on businesses, ensure a more objective approach to risks, and make the monitoring procedure more transparent for VAT payers. The changes take effect 30 days after official publication to give businesses time to adapt.

What has changed in the blocking approaches?
Thresholds for automatic (unconditional) registration of tax invoices have been increased: the transaction volume limit has risen from 1 million UAH to 3 million UAH per counterparty, giving small and medium-sized businesses broader opportunities to register without inspection.

Criteria for a positive tax history have been optimized — businesses with a record of diligent tax payment now have more opportunities to avoid blocking.

For regions at risk of hostilities, a mechanism for unconditional registration of all tax invoices has been introduced, regardless of size — this allows for stable operations and budget reimbursement.

Risk criteria: what’s new?
Risk criteria have become more understandable and less bureaucratic: the system now automatically assesses risks, factoring in industry specifics, taxpayer history, supplier status, and transaction volumes.

According to the Ministry of Finance and the State Tax Service, the number of businesses facing blocking will decrease by half. Honest businesses will be able to fill the budget without constant fear of invoice blocking.

Positive tax history: a new factor of trust
The updated approach to “positive tax history” provides for:

• Increased transaction volumes for unconditional registration and greater flexibility for small and medium businesses.
• Accounting for consistent tax compliance in previous periods.
• If a “white” status is present, a high chance of passing automated monitoring, reduced risk, and expedited registration of TIs/ACs.

Operations in combat zones
A special procedure applies for businesses in areas at risk of hostilities or occupation: for these regions, automatic invoice registration is provided to ensure uninterrupted activity and avoid unnecessary inspections. This is the government’s official response to demands of businesses operating in difficult conditions.

Registration of blocked invoices: unblocking mechanism
The procedure for automatic registration of blocked TIs/ACs has been improved — if changes to taxpayer data are verified, the system will make accelerated decisions.

Automatic consideration of the VAT taxpayer’s data table has been introduced — no need to submit additional explanations for standard deliveries, reducing the load on tax authorities.

Impact on business and budget
The system will become more predictable: businesses will be less at risk of blocking during routine operations, and automated monitoring will reduce administrative costs.

Investment attractiveness will increase — clear and transparent rules will foster growth of small and medium-sized businesses and reduce the number of complaints and disputes with the tax authorities.

All innovations aim for stable budget fulfillment, prevention of fictitious VAT credits and abuses, and enhanced transparency of goods and services circulation.

What remains unchanged
For operations with high risk of fictitiousness not confirmed by actual supplies, the blocking mechanism remains. Large businesses, new taxpayers, importers, and industries with problem histories remain under control, but criteria have become clearer.

Consequences for accountants and sole proprietors
The registration procedure is greatly simplified due to higher limits and expanded definition of positive history. The volume of explanatory documents to the tax authorities is reduced — a data table or explanations electronically are sufficient.

Clear response times introduced — blocking must be documented and automatic in the system.

Prospects of the reform
The Cabinet considers large-scale changes in the procedure for blocking tax invoices and ACs a step towards liberalizing VAT administration and stabilizing business operation during wartime and post-war periods. The new monitoring system is expected to focus only on real risks, giving conscientious taxpayers confidence in stable operation.

Conclusions and recommendations
The updated procedure provides real protection for small and medium-sized businesses, entrepreneurs in risky regions, and exporters. Accountants and managers should keep track of current invoice registration dates, new risk criteria, and changes in their own tax history. Don’t delay documenting transactions: automatic registration applies only to transparent activities.

This modern reform signals to businesses to develop confidently, spend less time on bureaucracy, and focus on real growth — not on fighting systemic blocking of TIs and ACs.

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