VAT for Entrepreneurs: the limit will be raised to 4 million and will come into effect in 2028

The government is preparing a bill on value-added tax for individual entrepreneurs, which is planned to be submitted to the Verkhovna Rada as early as March. The key change is the increase of the annual income limit for mandatory VAT registration from 1 million to 4 million UAH. Forbes Ukraine reports this.

The details were announced by Prime Minister Yulia Sviridenko during a meeting with journalists on February 13. According to her, the government agreed with the International Monetary Fund on exactly such a threshold, which corresponds to the upper limit of a similar threshold in European Union countries - about €85,000 per year.

VAT for Entrepreneurs: when will the new limit take effect

It is expected that the norm will come into force no earlier than 2028 - after the end of the war or after Ukraine joins the EU. The final timelines are still being discussed with the IMF. After the new rules are implemented, about 257,000 entrepreneurs will be required to register as VAT payers.

The government emphasizes that the increase in the limit is a compromise between the requirements of international partners and the position of small businesses, which criticized previous proposals for a significantly lower threshold.

VAT Bill: what else is planned to be changed

The provisions on VAT for entrepreneurs will be included in the large tax bill, which also includes:

• cancellation of preferential customs clearance for packages worth up to €150;

• taxing transactions of digital platforms;

• maintaining the permanent military tax at 5%.

These changes are part of Ukraine's commitments under the new extended financing program with the IMF, the parameters of which were agreed at a technical level at the end of 2025.

It should be noted that Ukraine risks disrupting the new credit program with the IMF for $8.1 billion due to the failure to meet four previous conditions.