Blocked VAT invoices: what to do when registration is suspended

Suspension of the registration of a VAT invoice is one of those situations that can create problems for a business very quickly. The counterparty does not receive its input VAT credit, settlements are delayed, and repeated blocking can affect the operation of the company as a whole.

The key in such a situation is not to limit yourself to resubmitting documents, but to understand the reason for the suspension and properly prepare evidence that the business transaction was real.

The procedure is governed by paragraph 201.16 of Article 201 of the Tax Code of Ukraine and by Resolution of the Cabinet of Ministers of Ukraine No. 1165 of 11 December 2019, which approved the procedures for suspending registration of VAT invoices and adjustment calculations. The procedure for decisions by the commissions is established by Order of the Ministry of Finance of Ukraine No. 520 of 12 December 2019.

1. Analyse the suspension receipt

Once registration is suspended, the taxpayer receives an electronic receipt. That is where the analysis starts: identify which criterion was triggered and which circumstances need to be evidenced.

The receipt contains more than the fact of suspension. It states the risk criterion on the basis of which registration was suspended, the calculated indicators for that criterion, and a proposal to provide explanations and copies of documents. This is effectively the terms of reference for the work ahead: the response must address the specific circumstance that was triggered, not the blocking in general.

Separately, check whether the company itself has been included in the list of taxpayers meeting the risk criteria. If the company has been designated as risky, blocking may be systemic rather than related to a single transaction.

This is the decisive fork, and the whole algorithm depends on it:

• the transaction is treated as risky — it is enough to evidence the reality of the specific supply;
• the taxpayer is treated as risky — while that decision stands, subsequent invoices will also be blocked, so the company’s status must be addressed first.

2. Prepare explanations and supporting documents

The taxpayer is entitled to submit written explanations and copies of documents confirming the information in the blocked invoice or adjustment calculation. These materials are considered by the regional-level commission.

They may be submitted within 365 calendar days following the date on which the tax liability arose. The deadline is generous, but there is no reason to delay: until the invoice is registered, your counterparty has no input VAT credit, and that is a commercial issue, not merely a tax one.

Depending on the transaction, the package may include contracts, specifications, invoices, acts of acceptance, delivery notes and transport documents, payment documents, documents on the acquisition or storage of goods, and other evidence.

The point is not to upload as many documents as possible. They must form a clear logical chain showing that the transaction actually took place and corresponds to the company’s business activity.

The most common mistake is to send a set of documents without an explanation that links them into a sequence: where the goods came from, where they were stored, how they were transported, who received them, how payment was made. The commission is under no obligation to reconstruct that chain for the taxpayer.

The regional-level commission considers the materials within 5 working days. It may request additional explanations, for which a further 5 working days are allowed.

3. Establish the cause of repeated blocking

If invoices are blocked regularly, the problem should be analysed more broadly.

The cause may lie in the risk criteria applicable to the taxpayer or to the specific transaction, in a mismatch between the declared activity of the company and its actual operations, or in other factors taken into account by the monitoring system. Procedure No. 1165 provides for separate criteria for risky taxpayers and for risky transactions — these are different lists with different consequences.

In such a situation the work may need to extend beyond individual blocked invoices to the VAT payer’s Data Table, or to removing the company from the list of risky taxpayers.

The Data Table is essentially a description of what the business actually does: types of activity, and the commodity and service codes it purchases and supplies. A Data Table accepted by the tax authority removes a substantial share of automatic suspensions, because the system stops treating the company’s ordinary operations as atypical.

The decision that a taxpayer meets the risk criteria is taken by the regional-level commission — and it can equally be reconsidered in the light of documents submitted.

4. What to do if registration is refused

If, having considered the documents, the tax service refuses to register the invoice, that decision may be challenged in the manner prescribed by law.

Before appealing it is important to review not only the decision itself but the package already filed: whether every stage of the transaction is evidenced, whether there are inconsistencies, and whether the response actually addressed the circumstances that triggered the suspension.

Administrative appeal. A complaint is filed with the State Tax Service of Ukraine within 10 working days following the day the refusal decision was taken. It is considered by the central-level commission.

The review periods are set by subparagraph 56.23.3 of paragraph 56.23 of Article 56 of the Tax Code: 10 calendar days from receipt of the complaint if the taxpayer did not express a wish to take part in its consideration, or 30 calendar days if it did. For the duration of martial law this period is 10 working days.

Court appeal. The administrative procedure is not mandatory and does not deprive the taxpayer of the right to go to court.

There is also a favourable mechanism to keep in mind: where the defined conditions are met, suspended invoices are registered automatically on the working day following the commission’s decision to remove the taxpayer from the risky list, or the central commission’s decision upholding a complaint. This mechanism was introduced by amendments to Procedure No. 1165 made by Resolution of the Cabinet of Ministers of Ukraine No. 574 of 2 June 2023.

Deadlines that must not be missed

Action	Deadline
Filing explanations and documents	365 calendar days following the date the tax liability arose
Consideration by the regional-level commission	5 working days
Filing additional documents at the commission’s request	5 working days
Filing a complaint against a refusal	10 working days from the date of the decision
Consideration of the complaint by the central-level commission	10 calendar days; 30 with the taxpayer’s participation; 10 working days during martial law

Missing the appeal deadline does not close the route to court, but it does remove a fast and cost-free instrument.

How to reduce the risk of future blocking

The problem is better approached as more than the need to unblock a particular invoice. Where blocking recurs, it is worth analysing the company’s tax model, the way transactions are documented, and the factors the tax service’s system may treat as risky.

In practice the best results come from combining three things: an up-to-date VAT payer’s Data Table, consistent documentation of transactions so that every stage is evidenced, and counterparty due diligence before signing — because a supplier’s risk status often carries over to the buyer’s transactions.

This removes the root cause instead of constantly dealing with consequences.

How ARGUS can help

ARGUS Consulting group supports businesses on suspension and restoration of VAT invoice registration.

We analyse the reason for the blocking, check the taxpayer’s status, help prepare the explanations and the package of supporting documents, and — where registration is refused — handle the appeal, including filing the complaint and going to court.

Has your VAT invoice been blocked, or has blocking become systemic? Contact ARGUS Consulting group — we will help identify the cause and set out the right course of action.

Legal basis

• Tax Code of Ukraine No. 2755-VI — para. 201.16 of Art. 201 (suspension of registration), subpara. 56.23.3 of para. 56.23 of Art. 56 (complaint review periods)
• Resolution of the Cabinet of Ministers of Ukraine No. 1165 of 11.12.2019 — procedure for suspending registration, risk criteria for taxpayers and for transactions, grounds for unconditional registration, the VAT payer’s Data Table, procedure for considering complaints
• Resolution of the Cabinet of Ministers of Ukraine No. 574 of 02.06.2023 — amendments to Procedure No. 1165, including automatic registration of suspended invoices
• Order of the Ministry of Finance of Ukraine No. 520 of 12.12.2019 (registered with the Ministry of Justice on 13.12.2019 under No. 1245/34216) — procedure for decisions on registration or refusal
• Taxpayer’s electronic cabinet — filing explanations, documents, the Data Table and complaints

Legal position stated as of 15 September 2026. Procedure No. 1165 is amended regularly; check the current wording before filing.