Ukraine Draft Law Proposes 5% VAT on Food, Medicines and Medical Goods

Summary 

• Draft Law No. 16069 proposes reducing VAT on medicines and medical devices from 7% to 5% and extending the 5% rate to additional health and children’s products. 

• The proposal would introduce a 5% VAT rate for specified basic food products, including meat, fish, dairy, vegetables, fruit, flour, cereals, oil, pasta and bakery products. 

• A temporary 7% rate is proposed for specified goods needed during electricity outages, but the draft has not yet been enacted. 

Extended article 

Ukraine’s Draft Law No. 16069 proposes significant changes to the VAT rates applicable to socially important goods. The bill would reduce the VAT rate on qualifying medicines and medical devices from 7% to 5%. The 5% rate would also extend to pharmacy-compounded medicines, food for special medical purposes, certain sanitary and hygiene products and specified children’s goods. 

The draft would introduce a 5% rate for a defined range of basic food products and a temporary 7% rate for goods intended to meet essential household needs during power outages. The proposal remains under parliamentary consideration and the rates have not entered into force. Businesses should therefore distinguish clearly between the current VAT rates and the proposed treatment. 

External sources: Read the Draft Law overview | Review the VAT proposal summary

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