On 11 November, the Verkhovna Rada of Ukraine passed Bill No. 16037-d in its entirety, which simplifies the administration of value added tax. The bill provides for raising the threshold for certain tax audits to 1 million hryvnias, the option of quarterly reporting for sole traders, and the automatic completion of tax documents. These changes are intended to reduce the time spent on bookkeeping and ease the administrative burden on entrepreneurs.
- On 11 November, the Verkhovna Rada passed a law to simplify the administration of VAT.
- The threshold for individual unannounced inspections is being raised from 100,000 to one million hryvnias.
- Sole traders who are VAT payers will be able to choose between monthly and quarterly reporting.
- Tax returns and invoices will be able to be pre-filled automatically.
- For transactions involving non-VAT payers, the process of issuing consolidated tax invoices will be simplified.
Sole traders will be able to submit VAT returns on a quarterly basis
One of the key changes will be the right of sole traders registered as taxpayers VAT, to choose the reporting period yourself — a calendar month or a quarter.
At present, returns for this tax are submitted on a monthly basis. Once the law comes into force, business owners who opt for quarterly reporting will be able to submit four returns a year instead of twelve.
This will help to reduce the number of reporting procedures, particularly for small businesses that do not have a dedicated accounts department.
The change applies specifically to sole traders who are already registered as VAT payers. It does not mean that VAT will automatically be introduced for all sole traders on the simplified taxation system.
The threshold for tax audits is to be increased tenfold
The Act provides that an increase in the threshold amount for budgetary reimbursement from 100,000 to 1 million hryvnias or a negative VAT balance, the declaration of which may give rise to an unscheduled documentary audit.
In practice, this means that the relevant amount, within the new threshold, will not in itself constitute grounds for an audit under this provision of the Tax Code.
However, this does not mean that tax audits will be abolished altogether. The State Tax Service will still be able to carry out audits on other grounds provided for by law.
Tax returns and invoices will be completed automatically
Another change concerns the taxpayer’s online portal. The State Tax Service will be able to pre-populate certain fields in VAT returns and tax invoices based on information already held in its systems.
All that remains for the business owner or accountant to do is to check the details provided, make any necessary corrections and submit the document.
It is important to note that automatic completion does not mean that returns are submitted automatically without the taxpayer’s involvement. The Ministry of Finance will determine how the new mechanism will operate and the scope of the data required.
The process of issuing tax invoices will be simplified for businesses
The Act also extends the scope for issuing summary tax invoices for transactions with customers who are not registered as VAT payers.
In particular, provision is made for such delivery notes to be issued no later than the last day of the month, including where advance payment is received from non-VAT payers, without any requirement regarding the regularity of supplies for the relevant transactions.
This should simplify document management for companies and entrepreneurs who make numerous sales to end consumers.
When will the new VAT rules come into force?
As at 11 November 2026 Bill No. 16037-d It has been adopted by the Verkhovna Rada and is currently being prepared for signature. In order to come into force, the law must be signed and officially published. The specific dates on which the new rules will apply should be determined by the final text of the law.
Until then, business owners should continue to comply with the current provisions of the Tax Code and submit their returns by the prescribed deadlines.
