The Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva, stated that the fund has not abandoned its requirement to introduce mandatory VAT for individual entrepreneurs (FOPs) in Ukraine. At the same time, for the approval of a new IMF program, it is sufficient to submit the relevant bill to the Verkhovna Rada, not its final adoption.
Source: OBOZREVATEL
Georgieva told Reuters after meetings in Kyiv with President Volodymyr Zelensky and Ukrainian senior officials. This was the IMF chief’s first visit to Ukraine in the past three years.
“Regarding VAT exemptions, we have stated very clearly: this must be done. We cannot allow the Ukrainian economy to remain between market and non-market models. The question is not whether to do it or not, but how exactly and how to gain parliamentary support,” Georgieva emphasized.
The fund expects the submission of a bill already developed by the Ministry of Finance and is discussing the possibility of giving Ukraine another year to secure parliamentary support. The new IMF program for Ukraine will provide $8.1 billion in funding, and the fund’s board of directors is expected to meet to approve it in the coming weeks.
What the Ministry of Finance bill on VAT for FOPs provides:
- Single-tax payers of groups 1–3 (except e-residents) must register as VAT payers if the amount of their taxable transactions over the last 12 months exceeds UAH 1 million.
- Only group 3 e-resident payers are exempt from this obligation.
- If a group 3 payer at a 5% rate reaches the UAH 1 million limit, they switch to a 3% rate + VAT.
- An application to change the rate must be submitted no later than the 10th day of the month following the month the limit was exceeded; the new rate applies from the 1st day of the month of submission.
- The income of VAT payers in groups 1–3 now includes the amount of accounts receivable after the statute of limitations (previously, this only applied to group 3).
- Payers who become VAT payers are required to keep records of income and expenses in a standard form (previously, for groups 1–2, the form was arbitrary).
- Old rules regarding deadlines for submitting applications when changing the rate have been removed, including the rule of 10 days before the start of the month.
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