On 11 November, the Verkhovna Rada passed in full draft law No. 16037-d on simplifying the administration of value added tax (VAT). The document provides for changes for taxpayers, including sole traders, as well as new requirements for issuing VAT invoices.
This is reported by the Ministry of Finance of Ukraine.
The draft law was finalised on the basis of the government bill No. 16037. Its aim is to simplify VAT administration, expand electronic interaction between taxpayers and the tax service, and improve tax reporting.
What will change for VAT payers
Pre-filled reporting. All VAT payers will be able to receive pre-filled tax returns and invoices based on information already held in the systems of the State Tax Service.
Choice of reporting period for sole traders. Entrepreneurs who are VAT payers will be able to choose for themselves whether to report monthly or quarterly.
Higher threshold for audits. The amount of negative VAT or budget reimbursement at which a documentary audit may be scheduled will be increased from UAH 100,000 to UAH 1 million.
New rules for consolidated invoices. They may be issued under certain conditions when an advance payment is received for goods or services supplied on a regular or continuous basis, as well as when providing services whose volume is determined by meter readings.
Transfer of input VAT credit. Companies undergoing reorganisation by way of transformation will be able to carry forward negative VAT into input VAT credit without a prior documentary audit.
VIN and IMEI in VAT invoices
The draft law introduces new requirements for issuing VAT invoices when selling certain goods:
- when selling passenger cars and lorries, buses and special-purpose machinery, it will be necessary to indicate the vehicle’s VIN;
- when selling smartphones and other phones — the International Mobile Equipment Identity (IMEI).
Some changes concern individuals who sell or exchange vehicles.
Income from the sale or exchange during the year of a passenger car, motorcycle or moped will not be taxed if the person has owned the vehicle for more than 183 days from the date of its state registration.
This rule will not apply to vehicles received as an inheritance.
In other cases, tax at a rate of 5% or 18% will be paid taking into account the length of time the property has been owned.
The draft law also provides for:
- a change to the criterion for inclusion in the list of taxpayers with a high level of compliance with tax legislation (“white business”): instead of 12 reporting periods, four quarters will be taken into account;
- the possibility to appeal the amounts of tax liabilities determined as a result of documentary audits. If the decision is made in favour of the tax authority, the taxpayer will have to pay penalties and interest in full;
- a temporary lifting of restrictions on stockpiling tobacco products for cigarette importers when purchasing excise stamps – until 31 December 2026;
- aligning tax legislation with changes in the area of mortgage bonds.
The draft law was developed to fulfil Ukraine’s international commitments to the European Union and the International Monetary Fund. Its adoption is one of the conditions for receiving macro-financial assistance from the EU and funding from the IMF.
After it is signed by the President of Ukraine, the law will enter into force the day after its official publication.
Certain provisions will take effect from 1 January 2027, others – from 1 July 2027, but not earlier than the entry into force of the law on securitisation and covered bonds.
- President Volodymyr Zelenskyy signed draft laws on 22 October abolishing preferential customs clearance for parcels up to €150 ordered on foreign marketplaces. He also signed a bill on taxing the income of users of digital platforms.