On taxes and other obligatory payments to the budget (Tax Code)

Article 408. The order for determining amounts of VAT allowed to be offset using the proportional method

1. According to the proportional method, the amount of VAT allowed to be offset for a taxable period is determined using the following formula:

VATabo = VATtbo х Ttax/ Ttot, where:

VATabo - the amount of VAT allowed to be offset. This amount may have a negative value;

VATtbo - the amount of VAT to be offset inclusive of the adjustment. This amount may have a negative value;

Ttax - the amount of taxable turnover;

Ttot - total amount of turnover determined as the sum of taxable and non-taxable turnovers.

In this case, when determining the values ​​of Ttax и Ttot, the persons, specified in paragraph 2 of Article 407 of this Code, do not take into account the turnovers, for which separate accounting is maintained in accordance with Article 409 of this Code.

If there is no turnover from sale in a taxable period, the amount of VAT allowed to be offset is determined as the amount of VAT to be offset inclusive of the adjustment.

2. VAT not allowed to be offset for a taxable period is determined using the following formula:

VATna = VATtbo – VATabo, where:

VATna - the amount of VAT not allowed to be offset. This amount may have a negative value;

VATtbo - the amount of VAT to be offset inclusive of the adjustment. This amount may have a negative value;

VATabo - the amount of VAT allowed to be offset, determined in accordance with paragraph 1 of this article. This amount may have a negative value.

The amount of VAT not allowed to be offset as well as its negative value is accounted for in the manner specified in paragraph 9 of Article 243 of this Code.