Herewith we are glad to inform you on the progress regarding the exemption of supply operations of imported baby food products from value added tax (hereinafter – VAT). The norm is stipulated by Articles 197.1.1 and 197.4 of the Tax Code of Ukraine № 2755-VI dated 2 December 2010 (hereinafter – the Tax Code).
According to Article 197.1.1 of the Tax Code the supply operations of baby food products are exempt from VAT taxation according to the list established by the Cabinet of Ministers of Ukraine whilst opportunity of VAT exemption for import operations of respective products is foreseen by Article 197.4 of the Tax Code.
On behalf of its members engaged in infant nutrition production and import, the EBA consistently appealed to the Government with request to set equal market conditions for domestic and imported baby food products and thus establish VAT exemption for imported baby food supply operations – the position which was not initially accepted by certain governmental stakeholders.
Nevertheless, due to the repeated EBA lobbying efforts the Ministry of Health Protection of Ukraine finalised the work on Draft Resolution of the Cabinet of Ministers of Ukraine On List of Baby Food Products and Infant Stock Supply Operations that are Subject to VAT Exemption and Order of Respective Supply (hereinafter – Draft Resolution) which supports EBA position (you may also consider official letter of Ministry of Health Protection of Ukraine to EBA for your reference). This Draft Resolution is now in the process of approval by various Ministries.
We would like to thank all EBA members who supported and contributed to EBA lobbying efforts that resulted in this progress and we will keep you informed of any further developments.