The Cabinet of Ministers refused to extend benefits for electric cars: VAT will return from January 1

The Cabinet of Ministers has rejected a proposal by members of the Verkhovna Rada to extend tax exemptions on the import of electric cars for another year, according to annexes to the draft state budget for 2026.

According to the current version of the Tax Code, the import and sale of electric vehicles in Ukraine is exempt from value added tax until January 1, 2026.

During the consideration of the draft state budget, MPs proposed to extend the privilege until the end of 2026, but the government rejected this proposal.

"The extension of preferential taxation of imports of electric vehicles for another year will lead to a shortfall in the budget's value added tax revenues," the justification says.

"This will create grounds for non-compliance with the requirements of the Memorandum on Economic and Financial Policy of June 19, 2025, concluded between Ukraine and the International Monetary Fund, according to which Ukraine undertook to refrain from tax policy and administration measures that may adversely affect the tax revenue base," the Cabinet of Ministers explained .

• on July 15, 2021, the Verkhovna Rada adopted two draft laws on stimulating the development of the environmental transport industry: No. 3477 and No. 3476. The laws provided for a number of tax preferences. Until January 1, 2026, VAT was exempted on the import and supply of vehicles equipped with electric motors, as well as new cars with internal combustion engines running exclusively on compressed or liquefied methane or biogas.
• In 2025, electric vehicles for the first time began to lead the ratings of new cars in Ukraine .