How VAT Reporting Works in Ukraine: A Complete Guide

Value Added Tax (VAT) in Ukraine is regulated by the Tax Code of Ukraine and must be reported monthly by all registered VAT payers. The reporting process is fully electronic and requires strict compliance with form requirements, deadlines, and documentation rules. The process differs significantly to what companies in the EU are used to for example. In short, it is significantly more complex. Below is a structured overview of how VAT reporting works and what taxpayers must consider when preparing a VAT declaration.

1. VAT Reporting Period and Submission Rules

Ukraine applies a strict monthly reporting period for all VAT-registered entities.

Key rules:

• Reporting frequency: one calendar month for all VAT payers.
• Form: always use the VAT declaration form valid on the date of submission. The current form is approved by Ministry of Finance Order No. 21 (28.01.2016), with amendments introduced in 2024.
• Deadline for submission: within 20 calendar days after the end of the reporting month.
• VAT payment deadline: within 10 calendar days after the filing deadline.
• Non-cumulative reporting: each month’s declaration stands on its own; no quarterly or cumulative reporting is permitted.

Failure to meet deadlines results in penalties and late payment interest.

2. Mandatory Information Required in the VAT Declaration

The Ukrainian VAT return must include carefully structured data based on the taxpayer’s accounting and tax records. The declaration consists of introductory data and detailed sections on VAT liabilities and VAT credit.

Core information needed:

3. Structure of the VAT Declaration

The Ukrainian VAT declaration is divided into three major sections:

Introductory Section

• Taxpayer name, Tax ID, address
• Reporting period
• Signature fields and metadata

Section I – VAT Liabilities

Includes:

• Domestic supplies at all applicable VAT rates
• Zero-rated exports and international supplies
• Adjustments (returns, corrections, first-event changes)

Section II – VAT Credit

Includes:

• Purchases subject to VAT, supported by registered tax invoices
• Import VAT (based on customs declarations)
• Adjustments to VAT credit

Section III – Calculation of VAT Liability

Summarizes:

• VAT payable
• Negative balance
• Amount eligible for carry-forward
• VAT refund (if applied for)

4. Required VAT Appendices

Depending on activities during the reporting month, several annexes must be submitted together with the main declaration:

• D1 – Detailed breakdown of VAT liabilities and VAT credit
• D2 – Negative VAT balance and carry-forward calculation
• D3 – Application for VAT refund
• D4 – Report on exempt transactions
• D5 – Annual VAT credit adjustment
• UR (Utochnuiuchyi Rozrakhunok) – Adjustment return used to correct previous declarations

All appendices must be consistent with the main declaration and with each other.

5. Accuracy and Compliance Requirements

Successful VAT reporting in Ukraine requires precise data handling.

Key rules:

• Report all figures in UAH (no kopecks), applying standard rounding.
• Submit the declaration electronically before the final working hour of the due date.
• All data must match the accounting records and the taxpayer’s VAT registers.
• Only correct and registered tax invoices may be included.
• Errors are corrected through a Utochnuiuchyi Rozrakhunok, not by modifying current-period data.

6. Common Critical Errors to Avoid

Several recurring mistakes often lead to tax notices, penalties, or rejection of VAT credit. The most common ones include:

• Declaring unregistered or incorrect tax invoices.
• Using the wrong reporting period or mistakenly submitting for the wrong month.
• Forgetting to include adjustments such as advances, returns, credit notes.
• Filing using an outdated declaration form.
• Not completing row 19.1 (registration limit), which is essential for VAT refund and credit calculations.

7. Practical Challenges and Risks in Preparing the VAT Declaration

The content of the attached analysis highlights several operational challenges commonly faced by businesses when preparing Ukrainian VAT declarations

Risks for VAT Declaration Preparation

1. Missing legally required data

VAT invoices require:

• Invoice registration number and date
• Invoice type
• Supplier/customer TIN
• Product/service codes (UKT ZED or DKPP)
• Transaction type (domestic, import, export, exempt)

Without these, invoices cannot be matched with the tax authorities’ electronic VAT system (ЄРПН).

• No data about the “first event”

VAT is triggered by the first event rule (payment or delivery).
Missing first-event dates makes it impossible to determine the correct reporting month.

•  Missing links to documents

Each VAT line must link to:

• Registered tax invoices
• Correction notes
• Customs declarations
• Accounting documents

Lack of linkage leads to reconciliation problems.

•  Incorrect currency treatment

VAT must always be calculated in UAH using official rates.
If exchange-rate rules are unclear or inconsistent, rounding and calculation errors occur.

•  Incorrect tax code mapping

Foreign or internal tax codes must be translated into Ukrainian VAT categories:

• 20%
• 7%
• 14%
• 0%
• Exempt
• Reverse charge

Incorrect mapping leads to wrong declaration lines.

•  Unknown counterparty VAT status

VAT reporting requires distinguishing transactions with VAT payers and non-payers.
This can only be verified through the official Ukrainian VAT register.

•  Missing correction data

Without proper correction notes, returns, discounts, and cancelled transactions cannot be reported correctly.

•  No separation of taxable vs. exempt operations

This affects the proportional VAT credit calculation (частка використання).

•  IT and process risks

Preparing a correct VAT declaration for large amounts of transactions requires:

• Data-mapping scripts
• Integration with Ukrainian reporting tools (BAS, Medoc, tax portal)
• Consistent exchange-rate sources
• Additional fields for first event, invoice linking, registration numbers

Conclusion

VAT reporting in Ukraine is highly regulated, documentation-heavy, and dependent on accurate, verified data. Monthly reporting, strict form requirements, and mandatory electronic submission mean that businesses must have a well-structured accounting system and fully documented transactions.

To ensure compliance:

• Maintain up-to-date and properly registered tax invoices
• Track the first event for every transaction
• Ensure accurate classification of operations into applicable VAT rates
• Match all data to accounting records and the electronic VAT system
• Use the correct declaration form and submit on time

When these requirements are met, VAT reporting becomes a predictable and manageable process. When they are not, errors can lead to penalties, reconciliation issues, and loss of VAT credit.