Entrepreneurs will be required to pay VAT starting in 2027: what the memorandum with the IMF entails

In Ukraine, changes to the simplified taxation system are being prepared, which will require some individual entrepreneurs to register as VAT payers. The new rules stem from the memorandum with the International Monetary Fund (IMF) and may come into effect on January 1, 2027. This was stated by people's deputy Yaroslav Zheleznyak.

According to him, this concerns mandatory registration for VAT for entrepreneurs whose annual turnover exceeds 1 million hryvnias. This obligation is one of the key points of the memorandum, without which Ukraine will not be able to receive a new funding program.

VAT for Entrepreneurs from 2027: deadlines and requirements

According to the announced schedule, the Ministry of Finance plans to publish the draft law for discussion at the end of December. By mid-January, the document is to be registered in the Verkhovna Rada, and by the end of March, it is to be adopted. The requirement for mandatory VAT will take effect from 2027.

The new rules mean the following for entrepreneurs:

• mandatory registration as a VAT payer after exceeding the threshold of 1 million UAH

• significant complications in reporting and administration

• regular submission of VAT declarations

• risks of blocking tax invoices.

Consequences for Small Business: the Position of Deputies and Entrepreneurs

Yaroslav Zheleznyak stated that he opposes such a model. In his opinion, the introduction of VAT for small businesses will lead to an increase in bureaucracy, fragmentation of business or a shift of some entrepreneurs into the shadow economy. Similar positions were voiced by business associations, which emphasize that the simplified system was created specifically for micro and small businesses.

At the same time, supporters of the changes point to the necessity of leveling tax conditions and combating shadow schemes, especially in the trade of imported goods. According to Zheleznyak, it is the state's inability to implement targeted solutions that has led to the proposal of a single strict threshold for all entrepreneurs.

Recall that people's deputy Yaroslav Zheleznyak stated that after the special operation 'Midas', business structures connected to the case figure Timur Mindich are massively re-registering on new nominal owners.