Ukrainian President Viktor Yanukovych has signed a law on the reduction of income tax for 2014 from 19% to 18% instead of the previously foreseen 16% stipulated in the Tax Code, and lowering value added tax (VAT) from 20% to 17%.
The relevant law on amendments to the Tax Code regarding the rates of certain taxes and tax benefits was adopted by the Verkhovna Rada on December 19.
It foresees a further reduction of income tax by 1 percentage point in 2015 and 2016, thus the rate of 16% will be valid from 2016.
According to the law, the rates of excise tax on spirit and other alcoholic drinks in 2014 will be increased by 14% (excise taxes on beer, natural wine, cider and perry remained unchanged) from the 1st day of the third month following the month when the law was published.
The document extends for two years the exemption from VAT of transactions with grain, scrap metal, raw hides, waste paper and wood (to prevent VAT refunds when exporting), cancels benefits for importing natural gas to the customs territory and doubles the fee for the special use of forest resources.
