Ukraine cancelled VAT and additional import duty on certain medicines

CMS Cameron McKenna, 
Kyiv, Ukraine, Thu, May 20, 2015

In March 2015 Ukraine beganallowing state procurement of certain medicines and medical devices to be conductedvia international organizations such as WHO, UNICEF, and a number of otherhighly reputable institutions. This is anticipated to dramatically reducecorruption in medicine procurement and thus should lead to a decrease of thevalue of certain medicines and devices for Ukrainian patients.

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

1. import of medicines andmedical devices on the customs territory of Ukraine and first supply of suchmedicines and devices;

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

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

The above exemption appliessolely when medicines and medical devices are imported and/or supplied on thebasis of agreements with qualified international procurement agencies and shallapply until March 31, 2019.

The Law came into force on 7 May 2015, however, the exemptioncannot be currently be applied until a Regulation is issued by the Cabinet ofMinisters of Ukraine to establish the list of medicines and medical devicesallowed for state procurement via international agencies.

Authors:

Olexander Martinenko, Senior Partner, olexander.martinenko@cms-cmck.com