VAT (value added tax) is an indirect tax included in the price of goods and services. The payer pays the budget the difference between the tax charged on sales and the tax paid to suppliers (input tax).
In plain words
The standard rate is 20%; some operations are taxed at 0% and 7% (Article 193 of the Tax Code). You must register as a VAT payer if the total of taxable supplies over the last 12 calendar months exceeds UAH 1,000,000 excluding VAT (Article 181); the rule does not apply to single tax payers of groups 1 to 3. Voluntary registration is possible (Article 182). A group 3 sole proprietor can choose the 3% single tax rate and pay VAT, or 5% with VAT included in the tax. Rates and thresholds are given as in the Tax Code version of 17 September 2026.
Sources
- Tax Code of Ukraine No. 2755-VI of 2 December 2010 — Arts. 181(181.1), 182, 193(193.1), 293(293.3), 14.1.181 (version of 17 September 2026). Checked 14.10.2026.
Example. Goods are sold for UAH 1,200 including VAT: the base is UAH 1,000 and 20% VAT is UAH 200. If suppliers were paid VAT of UAH 150 (input tax), UAH 200 − 150 = UAH 50 goes to the budget (illustrative numbers).