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Introduction of a new VAT tax rate of 7% may affect drug prices in Ukraine
Last reviewed: 02.07.2025
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In Ukraine, prices for medicines may increase due to the introduction of a one-time tax of 7%, which the new government decided to establish as an anti-crisis measure. Oleh Musiy announced this need last week.
The Minister of Health promises to take all possible measures to prevent price increases. O. Musiy is confident that it is possible to influence the pricing policy of manufacturers with the help of a transparent scheme for state purchase of medicines.
Regarding the introduction of the new tax rate, the Ministry of Revenue and Duties explains that the VAT rate of 7% is introduced for transactions on the supply of medicines that are permitted for use and production in Ukraine, and are also included in the State Register of Medicines, including pharmacies. In addition, 7% tax will be levied on medical products, according to the list that the Cabinet of Ministers approved in 2011 (Resolution No. 867 exempted medical products from VAT).
The sale of medicinal products may be carried out only with a license obtained in accordance with the law. The new 7% tax is additional, the main tax rate remains 20% as before. Since April 1, 2014, medicinal products and medical devices are supplied with a VAT tax rate of 7%. Medicinal products and medical devices that were purchased before April 1 must be sold using the new tax rate, even though they were purchased under a preferential tax regime. The amount of the new tax must be added to the price of the medicinal product or medical device.
Temporarily, until the approval of a new list of medical products or until the introduction of appropriate changes to the resolution, which was approved by the Cabinet of Ministers of Ukraine, in order to apply the tax exemption regime, the 7% rate is applied to transactions for the supply of medical products that are included in the register approved on August 8, 2011 (“Issues of exemption of medical products from value added tax”).
At the same time, for the application of the 7% tax rate, the requirement that was established by the above-mentioned resolution for the application of the tax benefit for transactions involving the supply of medical products remains in force: a tax rate of 7% will be applied when supplying products for medical use and with appropriate marking (marked "*" in the list).
When supplying medicinal products and medical devices subject to a 7% tax rate, a separate tax invoice must be prepared. When preparing such an invoice, in the field where the activity code must be entered, the number 7 is entered after a slash after the serial number.