EU considers tightening conditions for EUR 90 bln loan over VAT issues for individual entrepreneurs – media
The European Union is exploring the possibility of introducing stricter requirements for providing Ukraine with a loan of EUR 90 billion. In particular, the payment of part of the funds may be made dependent on the implementation of tax changes for business, Bloomberg reports, citing its own sources.
According to the publication, discussions in the European Commission concern EUR 8.4 billion of macro-financial assistance planned for the current year. This refers to the requirement to introduce a 20% VAT for entrepreneurs on the simplified taxation system whose annual income exceeds UAH 4 million. Currently, such business entities pay 5% of their revenue.
Bloomberg sources note that Brussels’ position coincides with the requirements of the International Monetary Fund (IMF), which also insists on reforming the preferential tax regime. Ukraine’s partners and the Ministry of Finance of Ukraine argue the need for changes because the current system drains funds from the military budget, distorts competition, and contributes to the expansion of the shadow economy. According to Ministry of Finance estimates, this step could attract over UAH 40 billion to the budget annually.
The European Commission confirmed to the publication that the institution is working on finalizing a memorandum of understanding that will define the financing conditions, as well as coordinating the reform agenda with the IMF to strengthen the Ukrainian economy and its integration into the EU.
At the same time, Ukrainian government officials are trying to convince partners to postpone these unpopular measures.
As reported, the Cabinet of Ministers and the IMF are currently discussing the possibility of moving the mandatory VAT registration for individual entrepreneurs with an income of over UAH 4 million to 2027. Prime Minister Yulia Svyrydenko previously called this idea "unconstructive" due to its high social sensitivity and lack of support in parliament.
The Association of Cities of Ukraine appealed to Svyrydenko with a demand to exclude the norm on mandatory VAT for individual entrepreneurs from the National Revenue Strategy until 2030. The European Business Association (EBA) called on the Cabinet of Ministers and parliament to find fair solutions to combat abuses of the simplified taxation system (STS) that would not involve increasing the burden on transparent business.
Earlier, Deputy Head of the Servant of the People faction Andriy Motovylovets said that the Verkhovna Rada is not ready now to support the government’s bill on the introduction of VAT for individual entrepreneurs, the adoption of which is a condition for cooperation with the IMF, and asks for additional calculations and explanations.
The EU assistance package of EUR 90 billion for 2026–2027 consists of approximately EUR 60 billion for defense support and EUR 30 billion for macro-financial assistance and the Ukraine Facility. The new tax conditions will not apply to the military component of the package. The first payments under this program are expected by the end of the second quarter of 2026 after the removal of Hungary’s veto and amendments to the EU financial framework.
