The Cabinet of Ministers has approved the order of VAT accumulation on special accounts by agricultural enterprises.

The corresponding decision was fixed in cabinet resolution No. 156 dated February 24, the text of which has been posted on the government's website.

"Changes have been put to the order of VAT accumulation by agricultural enterprises on special accounts opened at banks and/or authorities responsible for the treasury service of budget funds. Thus, agricultural producers have the opportunity to accumulate VAT funds to use them for production purposes. This mechanism will be in effect until January 1, 2017," reads the report.

As reported, the Verkhovna Rada endorsed a compromise decision on the abolition of a special VAT regime for farmers by providing them with a preferential regime for the period of transition to the general taxation system.

In 2016, during the period of transferring to the general taxation system milk producers and cattle farmers will retain 80% of VAT, while the remaining 20% will be sent to the budget.

Farmers, working with grains and industrial crops, will pay 85% of VAT to the budget, while the remaining farmers will pay 50% of VAT. A special VAT regime for agricultural producers will be abolished from 2017.