The Verkhovna Rada supported VAT simplification for businesses: what will change for entrepreneurs

Ukraine plans to simplify the administration of value-added tax (VAT). On October 13, the Verkhovna Rada supported in the first reading draft law No. 16037-d, which provides for new opportunities for entrepreneurs, improving tax reporting and reducing the bureaucratic burden on business.

264 people’s deputies voted in favor of adopting the draft law as a basis.

What changes are proposed for entrepreneurs

The draft law provides for a number of innovations aimed at simplifying the interaction of businesses with tax authorities.

In particular, it is proposed to:

Give individual entrepreneurs registered as VAT payers the right to independently choose the reporting period.
Expand the possibilities of automatically filling out tax documents.
Improve the procedures for drawing up and submitting tax invoices.
Develop electronic interaction between taxpayers and regulatory authorities.
Change certain rules for conducting documentary inspections.

It is expected that such changes will help entrepreneurs spend less time preparing reports and completing tax procedures.

Individual entrepreneurs will be able to choose when to file reports

One of the key provisions of the document is the ability to independently choose the reporting period for individual entrepreneurs who pay VAT.

In particular, entrepreneurs will be able to choose between two options:

Monthly filing of declarations.

Quarterly filing of declarations.

Thus, individual entrepreneurs will be able to determine a more convenient reporting format depending on the specifics of their activities.

The issue of introducing a quarterly reporting period was one of the provisions that was finalized during the consideration of legislative initiatives in the relevant parliamentary committee.

Threshold for individual tax audits may be increased to UAH 1 million

The bill also provides for an increase from UAH 100,000 to UAH 1 million in the threshold related to conducting unscheduled documentary audits of budget reimbursements and negative VAT.

This means that the proposed changes may affect the grounds for conducting individual audits of taxpayers.

At the same time, this is not about the complete abolition of tax control, but about reviewing the specific conditions for its implementation.

When will the new rules come into force

Currently, the Verkhovna Rada has supported draft law No. 16037-d only as a basis, that is, in the first reading.

For the proposed changes to come into force, the document must undergo further parliamentary consideration, be adopted as a whole and signed by the President of Ukraine.

Until the legislative procedure is completed, the current rules for VAT administration remain unchanged.

It is expected that the implementation of the proposed provisions will reduce the administrative burden on entrepreneurs and simplify the fulfillment of tax obligations.