The President of Ukraine Endorsed a Law on a Special VAT Rate for Farmers

In Ukraine, the conditions for VAT for the agricultural sector will change. The corresponding law was endorsed by the President of Ukraine Volodymyr Zelensky. The law provides changes in the VAT tax rate for companies that operate in the agricultural sector. The document was adopted by the Verkhovna Rada in December 2020.

In accordance with the provisions of the new law, the VAT rate for agricultural enterprises has been reduced from 20% to 14%. The new rate of value-added tax is applied to transactions for the supply of several types of agricultural products to the territory of Ukraine. In particular, companies that import cattle, pigs, wheat, barley, corn, flax seeds, sunflower seeds, etc. will be able to take advantage of the preferential VAT.

According to the press service of the President's Office, this step is necessary to support agriculture in Ukraine, as well as to attract investment in the industry. In addition, the press service noted that the reduction in the VAT rate will “reduce the motivation” of companies to use VAT optimization schemes. Thus, the authorities plan to reduce losses to the state budget and bring the agricultural sector out of the shadows.