Export Tax Invoice

One of our clients approached us with the following question:

Under one of our foreign economic contracts, the buyer and the consignee of goods exported by our company are different entities. Accordingly, field 4 of the 'export customs declaration' specifies a legal entity (consignee) that is not the buyer according to our foreign economic contract. How should we fill in the 'Recipient (buyer)' field in the 'export' tax invoice?

According to sub-paragraph 2 of paragraph 12 of the Procedure for Filling Out a Tax Invoice, approved by Order of the Ministry of Finance of Ukraine dated December 31, 2015, No. 1307, 'in the case of operations involving the export of goods outside the customs territory of Ukraine, the “Recipient (buyer)” field shall indicate the name (full name) of the non-resident and, separated by a comma, the country where the buyer (non-resident) is registered, while the “Individual tax number of the recipient (buyer)” field shall contain the conditional ITN “300000000000”, and the “Taxpayer identification number or series (if available) and passport number” field shall not be filled in. Thus, this field must specify the name of the buyer of the goods exported by the company according to the relevant foreign economic contract (and not the consignee).

At the same time, the procedure for filling out cargo customs declarations for foreign economic operations is regulated by other normative legal acts. Thus, according to sub-section 1 of Section 2 of the Procedure for Filling Out Customs Declarations on a Single Administrative Document Form, approved by Order of the Ministry of Finance of Ukraine dated 30.05.2012, No. 651, 'if, in accordance with the terms of a foreign economic agreement (contract) or another document used in international practice instead of an agreement (contract), the non-resident – a party to the foreign economic agreement (contract) or another document used in international practice instead of an agreement (contract) – is not the recipient, the field shall contain information about the recipient and the entry: “See addendum.”, and the addendum shall provide information about the non-resident – a party to the foreign economic agreement (contract) or another document used in international practice instead of an agreement (contract)'. It is obvious that in field 8 of the cargo customs declaration, issued by customs authorities and provided to the exporter for this foreign economic operation (form MD-2), in addition to information about the full name and legal address of the consignee, the inscription 'See addendum.' is also present. Accordingly, in the Addendum to this cargo customs declaration, we must necessarily see the name of the actual buyer of the inventory items for this foreign economic operation. If this is not the case, we recommend demanding that the customs authorities rectify the relevant shortcomings and issue you a customs declaration taking into account the above-described specifics.

Thus, as we can see, situations where the “Recipient (buyer)” field of the tax invoice and the “Recipient” field of the cargo customs declaration for a foreign economic operation specify the names and legal addresses of different legal (natural) persons are permissible from the perspective of current Ukrainian legislation. Accordingly, the taxpayer should not encounter any problems in proving their right to apply a 0% VAT rate to such an operation.

Director of Audit Services
Certified Auditor
Safinsky Viktor