Energy Issues

12/ 09/ 2025

EBA welcomes the extension of the cash accounting method for VAT on electricity supply transactions Starting October 1, 2025, the Law of Ukraine No. 4536-IX of July 16, 2025, “On Amendments to the Tax Code of Ukraine and Other Legislative Acts of Ukraine in Connection with the Adoption of the Law of Ukraine ‘On Integrated Prevention and Control of Industrial Pollution’ and Aiming to Improve Certain Provisions of Tax Legislation” enters into force. Until January 1, 2028, the application of the cash accounting method for VAT has been extended for transactions involving the supply of electricity, coal and/or coal enrichment products, as well as centralized water supply and wastewater disposal. The European Business Association has previously called on Members of Parliament to support this provision, in particular to introduce the cash accounting method for corporate income tax of RES producers until January 1, 2028, in order to address the issue of past years’ debt repayment. Debt in the renewable energy sector remains a critical obstacle to the timely payment of VAT. Electricity producers do not receive funds on time, which makes it impossible to pay VAT without the actual receipt of payments. Therefore, the application of the cash accounting method must be preserved.

EBA welcomes the extension of the cash accounting method for VAT on electricity supply transactions

Starting October 1, 2025, the Law of Ukraine No. 4536-IX of July 16, 2025, “On Amendments to the Tax Code of Ukraine and Other Legislative Acts of Ukraine in Connection with the Adoption of the Law of Ukraine ‘On Integrated Prevention and Control of Industrial Pollution’ and Aiming to Improve Certain Provisions of Tax Legislation” enters into force.

Until January 1, 2028, the application of the cash accounting method for VAT has been extended for transactions involving the supply of electricity, coal and/or coal enrichment products, as well as centralized water supply and wastewater disposal.

The European Business Association has previously called on Members of Parliament to support this provision, in particular to introduce the cash accounting method for corporate income tax of RES producers until January 1, 2028, in order to address the issue of past years’ debt repayment.

Debt in the renewable energy sector remains a critical obstacle to the timely payment of VAT. Electricity producers do not receive funds on time, which makes it impossible to pay VAT without the actual receipt of payments. Therefore, the application of the cash accounting method must be preserved.

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