EU may tighten tax requirements on €90B Ukraine loan — Bloomberg
Photo: The EU may tie a €90 billion loan to Ukraine to stricter fiscal conditions (Getty Images)
The European Union is considering imposing stricter conditions on a €90 billion loan to Ukraine. It plans to make part of the disbursements contingent on the implementation of unpopular tax changes for businesses, according to Bloomberg.
"The European Union is considering imposing stricter conditions on its €90 billion ($105 billion) loan to Ukraine, making some of the payouts dependent on the introduction of an unpopular tax change for businesses," the agency writes.
According to Bloomberg sources, this concerns €8.4 billion in macro-financial assistance that Ukraine expects to receive as early as this year. The EU’s initiative coincides with Kyiv’s attempts to persuade the IMF to postpone similar requirements under a separate financing program worth over $8 billion.
Among the possible changes is a revision of the special tax regime for small and medium-sized businesses.
Currently, certain enterprises benefit from a preferential rate of about 5% of revenue, while the new proposal calls for the introduction of a standard VAT rate of 20% for companies with annual revenue exceeding 4 million hryvnias.
It is estimated that such a reform could generate additional budget revenues of about 40 billion hryvnias annually.
Although the new conditions apply only to part of the overall aid package (which allocates about 60 billion euros for defense), their implementation may prove challenging.
The measures are extremely unpopular, and disagreements over tax policy have already arisen between parliament and President Volodymyr Zelenskyy.
Previously, Parliament refused to support certain changes, including the taxation of foreign parcels, another IMF requirement.
Further IMF tranches depend on the adoption of these and other fiscal measures. Ukraine has already missed the March deadline and has until June, when the next program review is scheduled. Currently, $1.5 billion has been allocated, while approximately $700 million remains in question.
According to sources, the parties discussed the possibility of postponing the introduction of VAT for sole proprietors by about a year, but the IMF insists on the rapid adoption of some of the changes.
Even if Ukraine buys some time, it will eventually have to bring its tax system into line with EU standards as part of its accession negotiations.
VAT for sole proprietors
The elimination of the VAT exemption for sole proprietors upon reaching a certain income threshold was included as one of the conditions of the new IMF program for Ukraine.
At the end of 2025, the Ministry of Finance of Ukraine had already submitted a corresponding draft law.
Finance Minister Serhii Marchenko previously noted that changes to the simplified taxation system for sole proprietors, specifically the introduction of VAT once the established limit is exceeded, are part of a future reform planned for implementation in 2027.
However, Ukrainian Prime Minister Yulia Svyrydenko recently stated that the IMF will not require the introduction of VAT for individual entrepreneurs in 2027.
The parties agreed to focus on alternative measures to fill the budget.
