Governmental authorities offer again to charge VAT on some medical devices at the 20% rate

It is well-known that according to the Tax Code of Ukraine the reduced VAT rate in the amount of 7 percent shall be applied to operations on supply and import of medicinal products, which are allowed for production and administration in Ukraine and included into the State register of medicinal products, as well as medical devices under the list, approved by the Resolution of the Cabinet of Ministers of Ukraine of 01 July 2014 No. 216 (i.e. all registered medical devices), into the customs territory of Ukraine.

Pursuant to order issued as the result of the governmental meeting of July 23, 2014 the MoH of Ukraine has developed and announced the beginning of public discussion on the draft resolution of CMU, under which new List is expected to be approved.

Thus, the proposed draft is intended to return the pre-existing model of charging VAT at the reduced 7% rate on only some medical devices, and not on all registered ones as it is as of today.

Therefore, governmental authorities offer to increase the number of medical devices operations on supply and import of which into the territory of Ukraine will be charged with the full rate of VAT, respectively.

In the text of the explanatory note to the draft resolution it is not specified principles, methods and parameters, in compliance with which the list in the draft resolution was formed, which thereby excludes the application of a unified approach to taxation of one group/category of products - medical devices, which in turn, contradicts the European approach, reflected in the Council Directive 2006/112/EC.

By its structure the list proposed by the MoH of Ukraine is formed by the names of medical devices and their codes of nomenclature, and based on the list that was approved by the CMU of April 23, 2014 No. 118, and on the recommendations of the State Fiscal Service of Ukraine.