{"id":41583,"date":"2026-07-10T08:21:19","date_gmt":"2026-07-10T05:21:19","guid":{"rendered":"https:\/\/specservis.com.ua\/vat-exempt-procurement-prozorro-introduces-new-rules-for-construction-tenders\/"},"modified":"2026-07-10T08:21:19","modified_gmt":"2026-07-10T05:21:19","slug":"vat-exempt-procurement-prozorro-introduces-new-rules-for-construction-tenders","status":"publish","type":"post","link":"https:\/\/specservis.com.ua\/en\/vat-exempt-procurement-prozorro-introduces-new-rules-for-construction-tenders\/","title":{"rendered":"VAT-Exempt Procurement: Prozorro Introduces New Rules for Construction Tenders"},"content":{"rendered":"<p>Until recently, winning a tender for the renovation of a school, hospital, or other public facility often depended not only on the quality of a contractor\u2019s work but also on the tax system under which the company operated. Two contractors could submit bids for exactly the same scope of work with identical costs, yet the winner would be the company whose tax status allowed it to display a lower price on paper.<\/p>\n<p>That has now changed.<\/p>\n<p>VAT-exempt bid evaluation has officially been introduced in Ukraine\u2019s public procurement system, and the construction industry is already feeling the impact.<\/p>\n<p>For thousands of construction companies competing daily for public contracts through Prozorro \u2014 from road rehabilitation projects to the reconstruction of schools and hospitals \u2014 VAT has long been more than an accounting issue. It often determined who won a contract and who lost a tender, regardless of actual project costs or performance capabilities.<\/p>\n<p>The reform affects virtually every public construction procurement procedure in Ukraine, from the major renovation of a school in a small municipality to large-scale regional infrastructure projects.<\/p>\n<h2>What Resolution No. 132 Has Changed<\/h2>\n<p>On July 1, 2026, Resolution No. 132 of the Cabinet of Ministers of Ukraine, adopted on February 5, 2026, entered into force.<\/p>\n<p>The resolution introduced amendments to two key public procurement regulations:<\/p>\n<ul>\n<li>The Procedure for the Formation and Use of the Electronic Catalogue (Resolution No. 822);<\/li>\n<li>The Special Rules for Public Procurement During Martial Law (Resolution No. 1178).<\/li>\n<\/ul>\n<p>The primary objective of the reform is to eliminate the influence of different taxation systems on the evaluation of tender proposals.<\/p>\n<p>Key changes include:<\/p>\n<ul>\n<li>Suppliers must now submit price offers excluding VAT;<\/li>\n<li>The Prozorro system evaluates bids automatically based on prices excluding VAT;<\/li>\n<li>The lowest bid is determined according to the lowest VAT-exclusive price, regardless of the bidder\u2019s taxation regime;<\/li>\n<li>Procurement procedures launched on or before June 30, 2026, continue under the previous rules;<\/li>\n<li>Contracting authorities must continue to indicate the expected procurement value including VAT when the procurement item is subject to taxation;<\/li>\n<li>Tender security requirements are now calculated based on the expected procurement value excluding VAT.<\/li>\n<\/ul>\n<h2>Why This Matters for Construction Companies<\/h2>\n<p>Before the reform, companies operating under simplified taxation regimes often enjoyed a structural advantage. Their bids appeared cheaper simply because VAT was not included, even when the actual cost of the works was comparable to that of competitors operating under the general taxation system.<\/p>\n<p>As a result, large contractors with extensive experience delivering public infrastructure projects occasionally lost tenders not because of higher construction costs, inferior materials, or weaker qualifications, but because of tax-related pricing differences.<\/p>\n<p>VAT-exempt procurement removes this distortion.<\/p>\n<p>The system now compares the actual value of the proposed works rather than the tax status of the bidding company.<\/p>\n<p>This is particularly important in the construction sector, where large contractors and smaller companies frequently compete for the same public contracts. Previously, differences in taxation often influenced procurement outcomes more than the true cost of project delivery. Under the new rules, competition is based more directly on commercial and technical merit.<\/p>\n<h2>What It Means for Public Clients and Contractors<\/h2>\n<p>For capital construction departments, regional administrations, municipal authorities, and public utility companies that issue tenders through Prozorro every day, the reform creates a simpler and more transparent procurement environment.<\/p>\n<p>The winning bidder is determined by the most competitive price for the actual scope of work being procured.<\/p>\n<p>For construction companies, the new rules encourage competition based on:<\/p>\n<ul>\n<li>Cost efficiency;<\/li>\n<li>Technical capability;<\/li>\n<li>Quality standards;<\/li>\n<li>Project delivery timelines;<\/li>\n<li>Proven experience.<\/li>\n<\/ul>\n<p>Rather than focusing on taxation structures, contractors can compete on the factors that genuinely matter for successful project execution.<\/p>\n<h2>A Step Toward a More Transparent Construction Market<\/h2>\n<p>Ukraine\u2019s public procurement system has undergone numerous adjustments since the launch of the country\u2019s large-scale recovery and reconstruction efforts. Each reform has aimed to improve transparency, fairness, and efficiency.<\/p>\n<p>The introduction of VAT-exempt bid evaluation represents another important step in that process.<\/p>\n<p>By removing tax-related distortions from tender evaluations, the reform brings Ukraine\u2019s procurement framework closer to its fundamental purpose: ensuring fair competition based on value, quality, and performance rather than technical advantages arising from different taxation regimes.<\/p>\n<p>For public clients, contractors, and the construction industry as a whole, this change helps create a more level playing field \u2014 one where successful bids are determined by the merits of the proposal rather than by differences in tax treatment.<\/p>\n<p><em>Source: Prozorro Infobox<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>VAT-exempt bid evaluation has officially been introduced in Ukraine\u2019s public procurement system, and the construction industry is already feeling the impact.<\/p>\n","protected":false},"author":2,"featured_media":41506,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_yoast_wpseo_focuskw":"","_yoast_wpseo_title":"","_yoast_wpseo_metadesc":"","_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[203],"tags":[],"class_list":["post-41583","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","category-203","description-off"],"acf":[],"jetpack_featured_media_url":"https:\/\/specservis.com.ua\/wp-content\/uploads\/2026\/07\/zakupivli-bez-pdv.png","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/specservis.com.ua\/en\/wp-json\/wp\/v2\/posts\/41583","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/specservis.com.ua\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/specservis.com.ua\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/specservis.com.ua\/en\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/specservis.com.ua\/en\/wp-json\/wp\/v2\/comments?post=41583"}],"version-history":[{"count":0,"href":"https:\/\/specservis.com.ua\/en\/wp-json\/wp\/v2\/posts\/41583\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/specservis.com.ua\/en\/wp-json\/wp\/v2\/media\/41506"}],"wp:attachment":[{"href":"https:\/\/specservis.com.ua\/en\/wp-json\/wp\/v2\/media?parent=41583"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/specservis.com.ua\/en\/wp-json\/wp\/v2\/categories?post=41583"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/specservis.com.ua\/en\/wp-json\/wp\/v2\/tags?post=41583"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}