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New VAT Innovations: Cash Method Extended, New Tax Exemption Introduced in Energy Sector

  • The law effective from October 1, 2025, introduces changes to VAT taxation.
  • The cash method for VAT is extended until January 1, 2028, for electricity, coal, water supply, and sewage services.
  • A new VAT exemption is introduced for the transfer of state and municipal irrigation systems.
  • The exemption applies if the transfer is free and to water user organizations.
  • This exemption is temporary and will last until Ukraine becomes a full EU member.
  • No VAT obligations are accrued under this exemption.
  • Water user organizations are non-profit entities for managing irrigation systems.

Source: od.tax.gov.ua

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.



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