Ukraine Prepares a New VAT Threshold for Entrepreneurs

In Ukraine, the introduction of mandatory VAT registration is being discussed for entrepreneurs whose annual turnover exceeds €85,000 — by current estimates, that is more than UAH 4 million.

This was reported by People's Deputy from "Servant of the People" and member of the parliamentary committee on finance, tax and customs policy, Olga Vasylevska-Smagliuk.

According to her, the threshold of €85,000 is now being considered as a benchmark for the future reform of the simplified taxation system. After exceeding it, an entrepreneur will have to register as a VAT payer.

At the same time, this is not yet a current norm. The relevant changes still need to be formalised in a bill and passed through the Verkhovna Rada.

The introduction of VAT for some single tax payers is one of Ukraine's commitments under the program with the International Monetary Fund. After the program review in the summer of 2026, the reform timeline was postponed: the law must be adopted by the end of April 2027, and the new rules should come into force on 1 January 2028.

At the same time, Ukraine undertook to raise the current threshold for mandatory VAT registration, but it must not exceed the maximum limit provided by EU rules for small business — €85,000. In the IMF documents from July, the specific Ukrainian threshold had not yet been finally set.

Thus, Vasylevska-Smagliuk's statement indicates that in the model currently being discussed, the authorities are focusing precisely on the maximum permissible European level.

Earlier, the Ministry of Finance already proposed setting the threshold at UAH 4 million. The spring draft provided for mandatory VAT registration of entrepreneurs on the simplified system after exceeding this amount. At that time, the reform was planned to launch from 1 January 2027, but the schedule was subsequently revised.

At the same time, the authorities are preparing measures that should simplify VAT administration for small business. On 3 September, the Cabinet of Ministers already approved a separate bill providing for quarterly reporting instead of monthly for individual entrepreneurs who are VAT payers, as well as preliminary filling of part of the declarations with tax service data.

Kurs previously wrote that after the program review with the IMF, mandatory VAT for simplified tax payers was postponed to 2028, and at that time the exact threshold had not yet been determined. Now, for the first time, a benchmark on the maximum European ceiling — €85,000 — has been voiced.

Based on materials from: Olga Vasylevska-Smagliuk, IMF, Ministry of Finance of Ukraine