The Cabinet of Ministers is preparing a major bill to change tax rules for individual entrepreneurs, tax parcels, and preserve military levies. The document may be submitted to the Verkhovna Rada as early as March. Prime Minister Yulia Svyrydenko announced this during a meeting with journalists on February 13.
The key change is the increase in the income threshold after which individual entrepreneurs will be required to pay value-added tax, from UAH 1 million to UAH 4 million per year.
According to Svyridenko, this indicator has already been agreed with the International Monetary Fund and corresponds to the upper limit of a similar threshold in European Union countries — about €85,000 per year.
According to government estimates, after the introduction of the new rules, approximately 257,000 Ukrainian individual entrepreneurs will be required to register as VAT payers.
At the same time, the Prime Minister clarified that this norm may come into force after the end of the war or after Ukraine joins the EU. The final dates are still being discussed with the IMF.
The VAT regulation for individual entrepreneurs will be included in a comprehensive bill, which will also provide for:
cancellation of the preferential taxation regime for international parcels worth up to €150;
introduction of taxation of digital platforms;
fixing the permanent military levy at the level of 5%.
Thus, the government plans to systematically revise part of the tax model, in particular to harmonize Ukrainian legislation with European standards.
The changes are part of Ukraine’s negotiations with the International Monetary Fund under a new 48-month Extended Fund Facility (EFF), which involves implementing a number of structural reforms required to receive financial support.
Back in December 2025, the Ministry of Finance submitted for public discussion a draft law that would have required individual entrepreneurs with income over UAH 1 million to pay VAT. This proposal drew significant criticism from businesses and economists, who warned of the risks for small businesses.
As a result of negotiations with business and international partners, the government began discussing raising the threshold to UAH 2–4 million. The parties ultimately agreed on an upper limit of UAH 4 million.
Earlier, the Prime Minister also reported that the IMF had agreed to review or mitigate some of Ukraine’s tax requirements due to the consequences of Russian attacks on energy infrastructure and the difficult economic situation.
In particular, the fund agreed to waive the immediate implementation of certain tax changes, but key reforms, including VAT for individual entrepreneurs, remain part of Ukraine’s long-term structural commitments.
Previously, the Cabinet of Ministers decided not to submit to the Verkhovna Rada in February a draft law on the introduction of mandatory VAT for individual entrepreneurs.
