Ukraine. Drug sale in Ukraine: VAT-taxation

According to Subclause 5.1.7 Clause 5.1 Article 5 of the Law of Ukraine «On Value Added Tax» # 168/97-ВР dd 03.04.1997, delivery transactions (including those by pharmacies) with drugs and medical products registered and permitted for application in Ukraine under the list, determined annually by the CMU prior to 1 September of the year preceding the reporting year, are VAT-.exempted.

The Resolution of the CMU # 1949 «On the List of Drugs and Medical Products, Sales Transactions Exempted from Value Added Tax» dd 17.12.2003 states that the list of drugs, sales transactions wherewith are exempt from value added tax, is the State Registry of Drugs.

Recently an issue of introducing VAT for drugs has been widely discussed with state authorities, mass media as well as the professional community. At the same time, representatives of authorities believe that introduction of VAT for drugs would only be reasonable after the reimbursement procedure of outpatient drugs has been introduced.
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