Simplification of VAT Administration: Parliament Adopts Draft Law as a Whole

On November 11, 2026, the Verkhovna Rada of Ukraine adopted the Draft Law No. 16037-d "On Amendments to the Tax Code of Ukraine Regarding the Simplification of Value Added Tax Administration" as a whole. The Draft Law was revised on the basis of government Draft Law No. 16037.

The Draft Law aims to simplify VAT administration, enhance electronic interaction between taxpayers and controlling authorities, and improve procedures for preparing VAT reporting and tax invoices.

Key changes for VAT payers

• All VAT payers will be able to receive pre-filled VAT reporting forms and tax invoices. These will be generated based on data available in the information and communication systems of the State Tax Service (STS). The Ministry of Finance will determine the procedure and scope of data used for this purpose.

• Individual entrepreneurs registered as VAT payers will be able to choose their reporting period: quarterly or monthly.

• The threshold at which a documentary tax audit may be initiated in relation to declared VAT refund amounts and/or negative VAT balances will increase from UAH 100,000 to UAH 1 million.

• VAT payers will be able to issue consolidated tax invoices if they receive payments (advance payments) for goods or services exceeding the value of those supplied during the month, provided that such supplies are regular or continuous. This right will also extend to VAT payers supplying goods or services whose volumes are determined using metering devices.

• Taxpayers will be able to appeal the amounts of tax liabilities paid following documentary audits. However, if a decision is made in favour of the controlling authority, the taxpayer will be required to pay all applicable fines and penalty interest in full.

• VAT payers undergoing reorganisation through conversion will be able to transfer negative VAT balances to their VAT tax credit without the need for confirmation through a documentary audit.

• One of the criteria for taxpayers with a high level of compliance with tax legislation ("white business") will be revised: four quarters will be taken into account instead of 12 reporting (tax) periods.

New requirements for tax invoices

• When selling vehicles classified under headings 8702–8705 of the Ukrainian Classification of Goods for Foreign Economic Activity (UKT ZED), including passenger cars, trucks, buses and special-purpose vehicles, the vehicle identification number (VIN) must be indicated in the tax invoice.

• When selling smartphones and other phones, the International Mobile Equipment Identity (IMEI) number must be indicated in the tax invoice.

Sale of vehicles by individuals

Income from the sale (exchange) of a passenger car, motorcycle or moped during a year will be exempt from taxation if the individual has owned the vehicle for more than 183 days from the date of its state registration.

This requirement will not apply to inherited vehicles. Tax at a rate of 5% or 18% will be payable depending on the period for which the individual owned the vehicle.

Other changes

• Until December 31, 2026, importers of filtered and unfiltered cigarettes will be temporarily allowed to purchase excise tax stamps without restrictions on the accumulation of tobacco product stocks (anti-forestalling restrictions).

• Tax legislation has been aligned with amendments to legislation governing mortgage bonds.

The Draft Law was developed to fulfil Ukraine's international commitments to the European Union and the International Monetary Fund. Its adoption is one of the key conditions for receiving EU macro-financial assistance and IMF financing tranches.

Following the President of Ukraine's signature, the Law will enter into force on the day after its official publication. Certain provisions will enter into force on January 1, 2027. Other provisions will take effect on July 1, 2027, but no earlier than the entry into force of the Law of Ukraine "On Securitisation and Covered Bonds".