Government Re-Approves Reform of VAT Rules for Businesses
On 3 September 2026, the Cabinet of Ministers approved a draft law amending the Tax Code to simplify VAT administration. The proposal would introduce quarterly VAT reporting for individual entrepreneurs (FOPs) instead of monthly reporting, reducing the number of reporting periods from 12 to four per year. It would also allow the State Tax Service to pre-fill certain VAT return and tax-invoice data through electronic services.
The draft would also increase the threshold triggering an unscheduled documentary audit in connection with VAT refunds or negative VAT balances from UAH 100,000 to UAH 1 million. It would further simplify the use of consolidated VAT invoices for supplies and advance payments involving non-VAT payers. The draft still requires parliamentary adoption.
For businesses, the main impact would be reduced VAT compliance workload and fewer circumstances in which relatively small VAT refund amounts can trigger unscheduled audits.
Ukraine Moves to Update Transfer Pricing Rules to OECD and EU Standards
On 4 September 2026, the Government approved a Ministry of Finance draft law proposing further amendments to Ukraine’s transfer pricing rules. The stated objectives are to protect Ukraine’s tax base, reduce tax disputes and double-taxation risks, and further align Ukrainian legislation with OECD and EU standards.
The reform forms part of a wider package of tax legislation connected with Ukraine’s commitments to the EU and IMF and access to international financial assistance.
This is particularly relevant for multinational groups and Ukrainian companies with controlled transactions. Businesses should monitor the final wording because changes to transfer-pricing methodologies, documentation requirements or related-party rules can materially affect tax compliance and cross-border structuring.
Government Proposes EU-Style Limitation on Interest Deductibility
On 7 September 2026, the Cabinet of Ministers approved Draft Law No. 16036, implementing Article 4 of the EU Anti-Tax Avoidance Directive (ATAD). The reform concerns restrictions on the deductibility of borrowing costs for corporate income tax purposes.
The legislation targets situations where businesses are financed through debt rather than equity, including financing provided by parent companies or other entities within the same corporate group. The proposed rules are intended to align Ukraine’s system with the EU framework for preventing excessive interest deductions and tax-base erosion. If adopted, the new regime would apply from 1 January 2028; interest relating to earlier periods, including 2027, would remain subject to the existing rules.
This could become a significant issue for leveraged companies and international groups using intra-group loans, particularly when reviewing financing structures ahead of 2028.
Government Re-Approves VAT and Customs Reform for International Parcels
On 7 September 2026, the Cabinet of Ministers again approved a package of two draft laws concerning taxation of small international postal and express consignments worth up to EUR 150, particularly goods ordered through foreign online marketplaces.
The package consists of amendments to the Tax Code governing VAT on e-commerce transactions and amendments to the Customs Code governing customs formalities for international postal and express shipments. The relevant parliamentary committee had previously recommended adoption of Draft Laws No. 15112-D and 15460.
The reform is especially important for foreign marketplaces, e-commerce businesses, logistics companies and Ukrainian retailers competing with cross-border platforms, as it could materially change the tax treatment of low-value imported goods.
Government Re-Submits the New Labour Code to Parliament
On 3 September 2026, the Cabinet of Ministers re-approved and submitted the proposed new Labour Code of Ukraine to Parliament. The draft had previously been introduced in January 2026 but was withdrawn following the change of Government in July. The Government states that the core policy provisions remain unchanged, with technical recommendations from the International Labour Organization incorporated into the revised text.
The proposed Code would replace the current 1971 Labour Code and implement more than 30 EU directives. Key changes include greater use of electronic employment documents, new types of employment contracts and flexible working arrangements, risk-based labour inspections, new approaches to minimum wage determination, clearer rules on discrimination, mobbing and harassment, and a longer statutory minimum annual paid leave.
Of the developments this week, this has potentially the broadest long-term impact on employers because it could require revisions to employment agreements, HR policies, payroll practices and internal compliance procedures across virtually all sectors.
