The International Monetary Fund has shown understanding regarding the issue of implementing VAT taxation for individual entrepreneurs (IEs), which is extremely sensitive for Ukrainian businesses. This was reported by Prime Minister Yulia Svyrydenko, summarizing the results of the IMF’s spring meetings in Washington.
This is reported by Finway
Summary of Consultations with the IMF and Partners
During the negotiations, the Ukrainian delegation held a series of consultations with representatives of the IMF and European partners, emphasizing the complexity of the VAT taxation issue for IEs. As Yulia Svyrydenko noted, the partners agreed that this topic is indeed sensitive and requires a balanced approach. President Zelensky has repeatedly emphasized this in discussions with IMF representatives.
“During the Spring Meetings, we found understanding among our partners that this is truly a sensitive topic and not a constructive idea, as President Zelensky has repeatedly told IMF representatives,” she said.
Increasing the VAT Threshold and Next Steps
According to the head of the government, Ukraine and the IMF have reached a compromise regarding the taxation of IEs. In particular, the parties agreed to raise the threshold for mandatory VAT application to 4 million hryvnias, which is currently the maximum level of this tax on goods among European countries. There are approximately 257,000 IEs in the country with an annual turnover exceeding 4 million hryvnias, so the new rules will affect about two-thirds of entrepreneurs in this segment.
Previously, the introduction of this regulation was considered for January 1, 2027, but the final date for its implementation is still under discussion. The government will continue to work together with the IMF and other partners on alternative measures to ensure revenue for the state budget for 2027.
It is worth noting that in February, the IMF simplified agreements with Ukraine reached in November, revising previous structural benchmarks after discussions, including with Managing Director Kristalina Georgieva.