Pricing Regulations
Ukraine’s price setting regulations are stipulated in the Law of Ukraine on Prices and Price Establishment. Price-regulating authorities in specific industries include:
The National Commission for State Regulation of Communications and Informatization, which regulates fees for telecommunication services
The National Commission for State Energy and Public Utilities Regulation, which is the government regulator of prices for energy and utilities
The Government of Ukraine regulates the prices of medicines to treat cardiovascular diseases, type II diabetes (oral medications), and asthma. For other products and services, Ukrainian companies and individual entrepreneurs are granted liberty to set prices themselves.
Pricing and Value Added Tax (VAT)
Most businesses in Ukraine are organized primarily as individual private entrepreneurs, LLC companies, or joint stock companies. American exporters working with a Ukrainian partner to jointly price goods in Ukraine should be aware that individual private entrepreneurs are exempt from the obligatory 20 % VAT on goods resold to customers. They should also know that the price a customer pays for goods in retail outlets, wholesale, or distribution warehouses already includes 20 % VAT.
LLC companies and joint stock companies should include 20 % VAT into the price of their goods or services. The option of sale through an individual private entrepreneur is limited to sales revenues performed by an individual private entrepreneur over a one year period. For VAT purposes, three groups exist with different limits of annual sales revenues for each group: group I UAH 300,000 (up to approximately $ 12,000), group II UAH 1,500,000 (up to approximately $ 59,000); and Group III UAH 5,000,000 (up to $196,000). LLC companies and joint stock companies are not limited by a ceiling in annual sales revenues since they are required to include 20 % VAT in the price.
Depending on the scope of sales in goods and their nature, one can implement a mandatory ceiling in annual sales revenues by partnering with a team of several entrepreneurs. Businesses that sell their products through dozens of salespeople classified as individual private entrepreneurs use this option widely.