Ukraine cancelled VAT and additional import duty on certain medicines

In March 2015 Ukraine began allowing state procurement of certain medicines and medical devices to be conducted via international organizations such as WHO, UNICEF, and a number of other highly reputable institutions. This is anticipated to dramatically reduce corruption in medicine procurement and thus should lead to a decrease of the value of certain medicines and devices for Ukrainian patients.

Following such promising changes, Ukraine has recently adopted the Law No. 332 as of 9 April 2015 which established a temporary exemption from 7% VAT and 5% additional import duty to apply to the following transactions:

1. import of medicines and medical devices on the customs territory of Ukraine and first supply of such medicines and devices;

2. first supply of medicines by Ukrainian producers of medicines and medical devices; and

3. supply (transfer) of medicines and medical devices to final consumers (patients).

The above exemption applies solely when medicines and medical devices are imported and/or supplied on the basis of agreements with qualified international procurement agencies and shall apply until March 31, 2019.

The Law came into force on 7 May 2015, however, the exemption cannot be currently be applied until a Regulation is issued by the Cabinet of Ministers of Ukraine to establish the list of medicines and medical devices allowed for state procurement via international agencies.