Last year, only 63% of the requested VAT was refunded by the Tax Authority

Last year, the Value Added Tax (VAT) on imported goods amounted to 366.2 billion hryvnias, which increased by 1.4 times compared to the first year of the full-scale war. It’s almost the same as in 2021, which was 380.7 billion hryvnias. Meanwhile, domestic VAT — the tax on goods produced in the country — increased by 10% compared to 2021.

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VAT on domestic and imported goods

Year	2020	2021	2022	2023
Internal VAT	269.6	315.5	298.5	347
VAT on imports	274.1	380.7	253.1	366.2

The situation with VAT refunds in 2023 improved slightly, but still hasn’t reached pre-war levels. Last year, the Tax Service refunded 63% of the claimed amounts, which amounted to almost 78.5 billion hryvnias. This is 1.6 times less than in 2021. It’s worth noting that the refundable amounts decreased by 1.4 times compared to the same pre-war year.

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VAT inquiries and refunds

Year	2020	2021	2022	2023
Inquiries	146.59	173.71	123.04	125.35
VAT refunds	142.45	130.13	59.37	78.47

Overall, the worst VAT refund rates over the past 4 years were recorded in 2022 — only 48% of the claimed amounts were refunded, while the best rates were in the COVID-19 year of 2020: 97% of the requested amounts were refunded.

Last year, VAT from domestic goods, including refunds, made up 8.6% of the budget, while VAT from imported goods accounted for 11.5%. VAT contributed 20% of all revenues to the state budget in 2023. For comparison, in 2022, VAT accounted for 25% of the state’s income.