The Verkhovna Rada simplified VAT administration: what will change for businesses and individual entrepreneurs

The Verkhovna Rada of Ukraine has adopted a draft law that provides for the simplification of the administration of value-added tax (VAT). The innovations should reduce the bureaucratic burden on entrepreneurs, simplify tax reporting and reduce the number of inspections.

This was reported by the Verkhovna Rada and the Ministry of Finance of Ukraine.

What changes does the draft law provide for?

The document introduces a number of innovations for VAT payers:

Automated filling in of declarations. Entrepreneurs will be able to receive pre-filled VAT declarations and tax invoices based on information already contained in the databases of the State Tax Service.
Flexible reporting deadlines for individual entrepreneurs. Individual entrepreneurs who are VAT payers will have the right to independently choose the reporting period – a month or a quarter.
Reduction in the number of tax inspections. The threshold for ordering documentary checks regarding budget reimbursement and negative VAT will be increased from 100 thousand to 1 million hryvnias.
Simplification of tax invoice processing. The possibilities of compiling consolidated tax invoices are expanding.
Simplification of enterprise reorganization. The procedure for transferring negative VAT in the event of the transformation of a legal entity is provided for simplification.
What does this mean for entrepreneurs?

The proposed changes are designed to reduce the time that businesses spend on preparing tax documentation and simplify the fulfillment of tax obligations.

In particular, the ability to choose a quarterly reporting period may be convenient for individual entrepreneurs, and raising the threshold for documentary checks may reduce the administrative burden on VAT payers.

At the same time, the adoption of the draft law does not mean the abolition of tax control or the release of entrepreneurs from the obligation to pay taxes on time.

When will the new rules come into effect?

To enter into force, the law must be signed by the President of Ukraine and officially published.

Certain provisions of the document are scheduled to enter into force on January 1 and July 1, 2027.

Thus, entrepreneurs will receive additional tools to simplify tax accounting, however, the practical application of the new rules will depend on the entry into force of the relevant legislative norms.