VALUE ADDED TAX in Ukraine (since 2011)

Rules for the Ukrainian VAT.

The principle of the Value Added Tax is handled by the Ukrainian tax authorities is basically the same as in the globalizing business world. VAT amounts to 20% and is applicable depending on the art of activities and the volume of particular business. VAT is reported monthly. Pursuant to the current legislation, the Value Added Tax shall be reduced to 17% from January 1. 2014.

Newly registered companies need to accumulate 300.000,- UAH (appr. 37.590,- US dollars) and perform in this area annually in order to obtain the obligatory right to register as Value Added Tax Payers. Those who fail to reach the 300.000 mark lose the right to invoice the VAT, thus becoming unattractive for larger businesses to deal with.

Another crucial issue with the Ukrainian VAT is the import. Importing goods is taxed by the 20% Value Added Tax off the price of the goods. Now the trickiest of all is that, if a company is not registered as an official VAT Payer, this VAT customs clearance becomes irrefundable! A client of ours, a major steel producer from Asia, was directing to loose around half a million US dollars on irrefundable VAT just because it wasn’t registered as a VAT Payer. A tense co-operation between our client, logistics professionals and our management consultancy was required to tackle the issue.

Please ask us for advice before taking any action. You can do it here, it this blog right after this post. We are always happy to help.

Sincerely yours,
Alexei Sandakov
CEO, Lobusch Consulting

One Thought on “VALUE ADDED TAX in Ukraine (since 2011)

  1. Pingback: Ukrainian Joint Stock Companies – basics | Lobusch-Consulting

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