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Archive 2004

  • 01.04.2004

    The Struggle over VAT Refunds for Grain Exports

    (Code:Т32)

    The situation with VAT refunds for grain exporters (wheat, rye, barley) is characterised by considerable uncertainty at the moment. Since the approval of the state budget for 2004, numerous legislative projects have been launched. Among other things, they aimed at restricting the general rule that grain exporters get a full VAT refund when they export grain. Law 4467, for instance, declared that only grain producers and processors should be eligible for VAT refunds in the case of exports. However, the internationally accepted practice to refund VAT of exports is crucially important forboth exporters and farmers, as its abandonment would mean a double taxation of grain by both the exporting country (Ukraine) and the country of destination. The analysis of the attempts to use VAT regulations as a means to influence market outcomes has shown that this often results in a taxation of agricultural producers.

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