The Cabinet of Ministers approved new rules for taxation of international parcels: VAT can be charged from the first euro

The Cabinet of Ministers of Ukraine has approved a bill amending the Customs Code, which provides for the introduction of new rules for the taxation of international postal items. The document will be submitted to the Verkhovna Rada for consideration in the near future.

This was reported by the Ministry of Finance of Ukraine.

The bill is part of a package of legislative amendments together with bill No. 15112-d on amendments to the Tax Code. The government emphasizes that both documents should create a legal basis for the introduction of a European model of taxation of distance selling of goods in Ukraine.

VAT can be charged on all international parcels

The key innovation is the abolition of the current exemption for international shipments worth up to 150 euros.

If the bill is adopted, VAT will be charged on imported goods purchased through international marketplaces, starting from the first euro of the value of the goods.

Currently, international parcels worth up to 150 euros are exempt from paying value-added tax.

Why are the rules being changed

The Ministry of Finance explains that the current system creates unequal conditions for Ukrainian entrepreneurs.

According to government officials, foreign online sellers have a tax advantage over Ukrainian businesses, which negatively affects the development of domestic production and trade.

It is expected that after the introduction of the new rules, the state budget will receive an additional 10 billion hryvnias each year.

A step towards European standards

The Ministry of Finance notes that during the preparation of the document, the proposals of people’s deputies, business representatives, postal operators and express carriers were taken into account.

In addition, the adoption of this legislative package is one of the steps to harmonize Ukrainian legislation with the legislation of the European Union and is included in the list of structural beacons of the Memorandum of Ukraine with the International Monetary Fund.

When the new rules may come into effect

Even if the draft law is adopted, the new model of distance trading taxation will not come into effect before January 1, 2027.

Before launching the reform, the Cabinet of Ministers must confirm by a separate decision the readiness of all participants in the process, in particular state bodies, postal operators and information systems, to implement the new rules.