The International Monetary Fund has agreed to revise key approaches in its cooperation with Ukraine regarding the new Extended Fund Facility (EFF) program. Among the main changes is the increase of the annual income threshold for individual entrepreneurs, after which VAT is imposed, to 4 million UAH. This corresponds to the highest existing level for VAT taxation in European countries and will allow two-thirds of Ukrainian individual entrepreneurs to avoid changes in their tax burden.
This is reported by Finway
Main Agreements with the IMF Regarding Individual Entrepreneurs
Prime Minister Yulia Svyrydenko noted that such innovations became possible thanks to active consultations with IMF Managing Director Kristalina Georgieva, who visited Kyiv earlier this year during the massive attacks on the country’s energy infrastructure. She emphasized that further details and the timeline for the implementation of the new regulations are still being discussed with the Ukrainian parliament.
“In our work with the IMF, we agreed to raise the threshold (annual income for) the introduction of VAT for individual entrepreneurs to 4 million UAH (equivalent to about €85,000) — this is the maximum existing VAT level on goods in Europe. Thus, these changes will not affect 2/3 of all individual entrepreneurs,” the head of the government noted.
Next Steps and Impact on Business
The Prime Minister added that the final approval of the changes will likely occur within the framework of a consolidated tax bill. In addition to issues concerning individual entrepreneurs, this document aims to regulate the taxation of digital platforms, parcels, and the continuation of the military levy after the state of war ends. According to Yulia Svyrydenko, these initiatives are receiving positive feedback from the business community.
The head of the government emphasized the importance of the cooperation program with the IMF as a key factor for attracting international financial support, including obtaining a loan of €90 billion from the European Union.