Discusses pricing formula and other fees, value-added tax (VAT), etc.
Last Published: 8/6/2019

Business-to-Consumer: Like most consumers, the most important factor for Ukrainians is price, followed by quality, durability, and after sales service. The type of product also influences the importance that consumers place on the product’s country of origin. The same holds true for Ukrainian businesses representing foreign companies as agents, distributors, or representatives.

When establishing prices it is important to take into consideration the purchasing power of the average Ukrainian consumer. According to the State Statistics Committee of Ukraine, the average monthly salary in Ukraine in 2017 was UAH 8,777 (approx. $323), which represents a 35.5 percent year-over-year increase in UAH.

For pricing it is also important to consider the ages of potential end-users and the regions where they live.  The demand for higher-priced Western-manufactured products is far greater among the younger generation, with the sharpest contrasts seen between the “under 55” and “over 55” age groups. The widest differences are observed in the purchase of vehicles, personal care products, candy, jewelry, household goods, and electronics.

To review the prices for a wide variety of other products, please refer to Price.ua (in Ukrainian) and AllBiz (in English).

Business-to-Business: The most important factor for Ukrainian companies when purchasing equipment is quality, followed by new technology, efficiency, reliability, training support, and after-sales service. This is especially true in the agriculture, power generation, oil and gas, pharmaceutical, aviation, and information and communications technology sectors.

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

In April 2017 the Government of Ukraine began regulating 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 percent 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 percent VAT.

LLC companies and joint stock companies should include 20 percent 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 percent 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.

Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.