You're reading: Parliament corrects mistake in taxation of medicines and medical devices

The Ukrainian parliament has corrected a mistake in the taxation of medicines and medical devices committed in the law on prevention of financial catastrophe and the creation of preconditions for economic growth in Ukraine, setting the single rate for value added tax (VAT) at 7 percent.

A total of 235 lawmakers supported the government’s draft law on April 10.

As reported, the Ukrainian parliament on March 27 passed a law on
prevention of financial catastrophe and the creation of preconditions
for economic growth in Ukraine took effect on April 1, 2014. The law
foresees the imposing of 7percent of VAT on medicines and some medical devices
both imported and Ukrainian-made.

According to the document, VAT is imposed on all sale transactions
with pharmaceutical products. 7 percent VAT is imposed on all medicines
registered in Ukraine and medical devices included in the list which is
to be approved by the Cabinet of Ministers. 20 percent VAT will be imposed on
medical devices not included in the list.

The Income and Tax Ministry published the explanation, according to
which 20 percent VAT on imports of medicines is collected under general
conditions, and not at the 7 percent rate as it is foreseen on the
above-mentioned law.

Importers and distributors were waiting for the issue of VAT payment on imports of medicines at the 7% rate to be settled.