Bloomberg: EU to link parts of Ukraine aid package to tax reform requirements

The European Union plans to condition parts of its €90 billion financial assistance package for Ukraine on tax reforms required under an International Monetary Fund (IMF) programme, according to people familiar with the matter cited by Bloomberg.

The requirement is expected to apply to a €8.4 billion macro-financial assistance tranche, which is part of the broader EU support package for Ukraine.

EU member states agreed on May 18 to the conditions for the macro-financial assistance programme, with Economy Commissioner Valdis Dombrovskis confirming the decision in a post on X.

Under the proposed conditions, Ukraine would be required to pass legislation expanding the scope of foreign parcels subject to a 20% value-added tax (VAT). The measure is reportedly aligned with IMF-backed tax reform efforts, under which the Fund is prepared to provide approximately €700 million in additional support.

The €8.4 billion tranche is expected to be disbursed in stages, with Ukraine potentially receiving an initial payment in June, followed by further installments in September and later in the year, contingent on progress in implementing reforms.

However, the proposed tax changes could face domestic political resistance in Ukraine, with analysts warning they may be unpopular and difficult to pass in the Verkhovna Rada.

Ukraine’s Ministry of Finance said the government is continuing negotiations with the EU on the terms of the loan agreement.

The broader €90 billion EU loan package for 2026–2027 was approved on April 22 as part of continued financial support for Kyiv amid the ongoing conflict.

By Sabina Mammadli