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:
- Standard rate: 20% cut to 15%
- Reduced rate 1: 14% to 5%;
- Reduced rate 2: 7% to under 5%; and
- 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
