VAT obligations for FOPs are based on European integration requirements
The Ministry of Finance of Ukraine plans to require sole proprietors to pay value-added tax after their annual turnover exceeds 85,000 euros. This is equivalent to more than 4 million hryvnias at the current exchange rate. This was reported by RBC-Ukraine (Марія Науменко) citing Olha Vasylievska-Smahliuk, according to the portal PromPolitInform.
Government officials emphasize that such changes are driven not by internal agency initiatives, but by the need to fulfill international agreements. In particular, this concerns the adaptation of Ukrainian legislation to European Union standards.
Requirements of European Directives
As Svitlana Vorobei, Deputy Minister of Finance of Ukraine, explained, the introduction of value-added tax for simplified tax system entities is directly stipulated by the 112th EU Directive, which regulates the administration of this levy in European countries.
The government representative stressed that this is a pan-European requirement, not a local initiative of the Ministry of Finance or the parliament. During negotiations with international partners, the Ukrainian side managed to defend the most acceptable limit.
Negotiations with International Partners
“VAT for FOPs is not an invention of the Ministry of Finance. It is not an invention of the Tax Service, it is not an invention of the Verkhovna Rada. VAT for FOPs is a requirement of the 112th directive, which regulates the administration of value-added tax in EU countries,” Vorobei noted.
Thanks to diplomatic efforts, the Ukrainian delegation managed to set the threshold at the maximum possible level of 85,000 euros. All entrepreneurs whose annual revenue crosses this limit will be required to register as payers of this tax.
Obligations to the IMF
The introduction of such fiscal innovations is also recorded in the memorandum of cooperation with the International Monetary Fund under the current Extended Fund Facility (EFF) program.
Earlier, it became known that agreements were reached to postpone the implementation timeframe of this reform. In particular, in July the IMF agreed to delay the launch of the relevant norms for small businesses by exactly one year.
Photo: Міністерство фінансів України
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