Mandatory acts of work performed abolished

From now on, the parties to the contract may, by mutual agreement, not use acts of work performed, but record the fact of provision of services by means of an invoice signed by the contractor, which is recognized as a primary document for accounting and tax purposes, according to the Ministry of Economy.

The law does not abolish primary documents or remove control, but gives businesses the right to choose:

• certificates of completion are no longer mandatory;

• the parties may continue to work with certificates if they deem it appropriate;

• if agreed between the parties, an invoice signed by the contractor may be used instead of a certificate of completion.

This approach is in line with international practice: in most countries of the world and the EU, the basic document for confirming services rendered is an invoice, not a separate certificate.

The practice of mandatory certificates of work performed is a legacy of the post-Soviet model of document flow and creates a significant administrative burden on businesses: up to 5% of a manager's working time and up to 13% of an accountant's time is spent on managing work completion certificates; in large companies, up to 15 employees may be involved in this process, and the preparation and signing of a single certificate costs an average of UAH 200-300. As a result, the monthly cost of “unnecessary documents” for businesses reaches about UAH 4,000 per company.

It is estimated that the abolition of mandatory AVD will save Ukrainian businesses up to UAH 20 billion annually.

The adopted changes will also synchronize document flow in domestic and foreign economic activities, simplify the work of companies working with foreign partners, and reduce barriers to the export of services.

 #Business #Deregulation #DocumentFlow #Entrepreneurship #Invoice #Economy #Ukraine