Draft Law of Ukraine

"On Amendment of the Law of Ukraine on Value Added Tax"

This draft is an alternative version of the draft law N 2485 that has been introduced by the Cabinet of Ministers for the purpose of increasing 2003 budget revenue.

This draft provides for cancellation of the VAT privileged regime for excisable goods and goods covered by groups 1-24 of the Ukrainian Classification of Goods for Foreign Economic Activity, which are sold within the territories of special economic zones or are brought in Ukraine’s customs territory from special economic zones.

Cancellation of the said privileges will allow to prevent abuses and possibility of entry into the customs territory of Ukraine of excisable and agricultural goods without payment of value added tax.

According to this draft, the term ‘usual price’ shall be used for VAT taxation purposes in the meaning defined in Clause 1.20 of Article 1 of the Law of Ukraine “On Enterprise Profit Taxation”. Terminology unification will allow to use the same objects of taxation to assess VAT liabilities and profit tax.