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Ukraine cuts VAT 5% to 15%

Tax reforms to meet IMF loan requirements

Ukraine’s Cabinet on 27 December approved a 5% Value Added Tax rate cut from 20% to 15%. The reduction is part of a package of tax reforms agreed with the IMF for loan support following the illegal Russian invasion.

The indirect tax rate cuts will be implemented by 2028; but there is no fixed date for the VAT rate cut.

VAT cuts across all rates

The revised rates will be across the existing four rates:

  1. Standard rate: 20% cut to 15%
  2. Reduced rate 1: 14% to 5%;
  3. Reduced rate 2: 7% to under 5%; and
  4. Zero rate.

Other major tax reforms include:

  • Cut in the corporate income tax rate to 18%
  • Harmonised customs duties
  • Withdrawal of flat-rate income taxes for progressive rates


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