New Tax Law for IMF Approval Approved by Government: Who Will Be Required to Pay VAT.

Draft Law from Ukraine’s Ministry of Finance

According to TSN.ua: Ukraine’s Ministry of Finance has introduced a legislative proposal that consolidates the country’s tax commitments to the International Monetary Fund (IMF) into a single document containing several key fiscal requirements. This initiative is designed to generate roughly 60 billion UAH in additional annual revenue for the state budget.

Key Provisions of the Draft Law

Under the new rules, simplified-tax system taxpayers earning 4 million UAH or more per year will be required to register as value-added tax (VAT) payers starting January 1, 2027. Additionally, the draft law stipulates that fines for the first five violations within a year will be set at just 1 UAH, aiming to ease the financial burden on taxpayers. The obligation to pay the military levy—a critical funding source for the armed forces—has been extended until the reform of Ukraine’s Armed Forces is complete.

• The military levy rate for individuals is 5%
• For entrepreneurs in groups one, two, and four - 10%
• For group three - 1%

The draft law also introduces automatic taxation of income earned through digital platforms, reducing the income tax rate from 18% to 5%. Individuals with annual earnings below 2,000 euros are exempt from paying this tax. For parcels intended for personal use, amounts up to 45 euros are not subject to VAT.

The IMF has expressed concerns regarding Ukraine’s financing under its $8.1 billion program. As a result, the parliament must pass a series of tax amendments by the end of March to help stabilize the country’s economic situation and meet obligations to international creditors.

The proposed changes to Ukraine’s tax legislation represent a significant step toward ensuring the country’s financial stability and fulfilling commitments to international partners.

Adapting tax rules—particularly for simplified-system taxpayers and digital platform income—could help channel additional resources into the state budget, which is critically important under current conditions. Passing this draft law may also influence the confidence of investors and international creditors, who will be monitoring Ukraine’s progress in economic reform.