Finance ministry draws up measure for farmers to switch to new VAT administration system
Ukraine's Finance Ministry is working on a bill that would allow farmers to leave 50% of accumulated value added tax (VAT) on their special accounts, while 50% of VAT will be paid to the national budget.
"The finance ministry's position for consideration is the 50 to 50 ratio," Head of the parliamentary committee for the agricultural policy and land relations Taras Kutovy said at the Adam Smith Conferences' 7th annual Ukrainian Agribusiness Forum in Kyiv on Tuesday.
He said that it is likely the bill on return to the VAT benefit system that was in effect before 2016 would not be approved.
He said that the bill to change the VAT administration system for farmers would be initiated by the government. It will introduce changes starting from H2 2016.
The Ukrainian parliament has approved a compromise on revoking the beneficial VAT taxation regime for farmers via granting the beneficial regime for the period until they transfer to the general taxation system.
Farmers leave a part of accumulated VAT on their accounts and the rest of the sum is sent to the national budget from January 1, 2016.
The share of VAT left with farmers depends on the type of agricultural activities: for grain and industrial crop planting – 15%, cattle breeding – 80% and other goods – 50%.
The VAT beneficial regime for farmers will be revoked in 2017.