The Cabinet of Ministers submitted to the Verkhovna Rada a bill that at first glance looks like a gift to business: less reporting, fewer inspections, more automation. But behind the wording about "simplifying administration" lies the preparation of ground for far less pleasant news — the abolition of VAT exemption for the simplified tax system, planned for 2027.
What is changing right now
Individual entrepreneurs who are VAT payers are transitioning from monthly to quarterly reporting. Declarations and invoices will be able to be partially filled automatically — based on data that the tax service already has from cash register operators. The entrepreneur will only need to verify the figures and sign.
The threshold for unscheduled inspections when claiming VAT refunds or in case of negative values has increased tenfold — from 100,000 hryvnias to 1 million hryvnias. The exception remains cases where a desk audit reveals violations that cannot be checked remotely.
Why now
Formally, the document fulfills obligations to the EU and IMF. Its adoption is a condition for receiving the third tranche of macro-financial assistance from the European Union worth 1.45 billion euros. In other words, business simplification is not so much a concern for entrepreneurs as a technical requirement of creditors.
The Ministry of Finance promised that the simplification of administration would precede the abolition of VAT exemption for the simplified tax system.
Practical conclusion for individual entrepreneurs
Auto-filled declarations and less frequent reporting — this is not a gift forever, but a transitional period. The logic is simple: first teach the system and entrepreneurs to work with VAT in a more comfortable mode, then expand the circle of those who will pay this VAT. The reform will primarily affect individual entrepreneurs with larger turnovers, and will be implemented gradually — to avoid mass discontent.
The question for 2026: will the tax service manage to bring automation to a state where the transition to VAT for part of simplified taxpayers will truly be administratively painless, or will business face old administration problems already without preferential status.
