THE LAW ON THE VAT RATE FOR SUPPLY OF SPECIFIC AGRICULTURAL PRODUCTS HAS BEEN ADOPTED

Law No. 1600-IX of July 01, 2021 “On Amendments to the Tax Code of Ukraine Regarding the Value-Added Tax Rate for Taxation of Operations for Supply of Specific Agricultural Products” entered into force on August 01, 2021.

The Law restored the VAT rate of 20% for taxation of operations for supply of agricultural products in the customs territory of Ukraine and import into the customs territory of Ukraine classified under the following codes according to UCG FEA: 0102 (cattle, live); 0103 (pigs, live), 0104 10 (live sheep), 0401 (in terms of whole milk), 1002 (rye), 1004 (oats), 1204 00 (flax seeds, crushed or not ground), 1207 (seeds and fruits of other oilseeds, crushed or not ground), 1212 91 (sugar beet).

Accordingly, we left the VAT rate at 14% for the supply of such products: 1001 (wheat and a mixture of wheat and rye (meslin), 1003 (barley), 1005 (corn), 1201 (soybeans, crushed or not ground), 1205 (rapeseed, crushed or not ground), 1206 00 (sunflower seeds, crushed or not ground).

The draft law provided for those products for which the VAT rate of 20% has been restored, the following features:

– if the first event in the delivery of these goods occurred before the entry into force of this Law, the VAT rate and tax amount shall not be recalculated as of the date of occurrence of the second event;

– if after the entry into force of this Law, there is a refund of the prepayment (advance payment) or such goods delivered, the first event for the delivery of which occurred before the specified date, the adjustment of the amounts of VAT liabilities shall be carried out based on the VAT rate of 14%;

– if after the entry into force of this Law, these goods are delivered or funds are transferred due to an increase in the quantity or value of such goods, the first delivery event of which occurred before the specified date, the adjustment of the amounts of VAT liabilities shall be carried out based on the VAT rate of 20%.

If a VAT payer performs operations for the delivery of such goods in the customs territory of Ukraine that were purchased before the entry into force of this Law, such taxpayer shall retain a VAT tax credit in the amount that was accrued when purchasing such goods. Thus, the 20% VAT rate will be applied only to the occurrence of tax liabilities for operations after the entry into force of this Law.