Parcels from marketplaces may be subject to 20% VAT: a new bill has been registered in the Rada

In Ukraine, it is proposed to change the rules for taxation of goods that citizens order on foreign marketplaces. The Verkhovna Rada has registered an alternative bill No. 16051-1, which provides for special VAT administration for imported parcels. The proposed rate is 20%.

The new rules are proposed to be applied to distance sales of non-excise goods with an invoice value of up to 150 euros, which are received by individuals in Ukraine by international postal or express shipments.

The key change is that the obligation to administer VAT is proposed to be placed directly on marketplaces and electronic platforms.

Thus, the changes may apply to both foreign sellers and marketplaces, as well as Ukrainian buyers and intermediaries.

What is the proposed VAT rate

The draft law provides for a VAT rate of 20% for relevant transactions with imported goods.

For businesses, it is proposed to introduce a separate accounting and reporting format. In particular, a monthly report on the accrual and payment of customs duties is provided.

At the same time, such transactions do not provide for a tax credit, tax invoices, or the submission of a regular VAT declaration.

It is proposed to submit a special report by the 20th of the second month following the reporting month.

For which parcels are separate rules provided

The draft law separately regulates free parcels between individuals worth up to 45 euros, unaccompanied baggage worth up to 150 euros, as well as goods intended for security and defense needs.

It is important that at present this is only a legislative initiative. The proposed rules have not yet entered into force.

If the draft law is adopted, marketplaces, online stores, and other participants in e-commerce will have to adapt to the new procedure for accounting, reporting, and VAT administration.