Rada finally votes to abolish the benefit for foreign parcels up to 150 euros

On October 15, the Verkhovna Rada finally adopted a package of legislative changes that provide for the abolition of the VAT exemption for commercial parcels from abroad worth up to 150 euros. The parliament supported both necessary draft laws - tax and customs. The new rules are to come into force no earlier than July 2027.

The voting results were announced by Member of Parliament Yaroslav Zheleznyak. The relevant draft laws are also posted on the website of the Verkhovna Rada.

255 MPs voted for draft law No. 16051-1 on taxation of international parcels, and 249 voted for the related draft law No. 15460 on customs procedures. Both documents were adopted in the second reading and as a whole.

Thus, the parliament completed the adoption of a legislative package that for a long time could not be passed due to insufficient support from deputies. To enter into force, the adopted laws must still be signed and officially published.

What will change for international parcels

The main innovation is the abolition of the VAT exemption for commercial goods worth up to 150 euros that arrive in Ukraine through international postal and express shipments.

Currently, such purchases are not subject to VAT if their value does not exceed the established threshold. After the entry into force of the new rules, they will be subject to the standard VAT rate of 20% regardless of the value of the goods.

This refers precisely to the abolition of the VAT exemption, not to the automatic introduction of import duty on every parcel. The procedure for charging duty and VAT is regulated by different norms of legislation.

A special tax payment mechanism is being introduced for purchases through foreign marketplaces. It is envisaged that electronic trading platforms or their authorized representatives will charge and remit VAT to the Ukrainian budget.

This will allow paying the tax directly when placing an order in an online store. The Ministry of Finance is developing a relevant system similar to the European IOSS model.

At the same time, the legislation retains a number of exemptions. In particular, VAT will not be charged on non-commercial parcels worth up to 45 euros sent free of charge by one individual to another for personal or family use.

Also, the exemption for goods in unaccompanied baggage worth up to 150 euros is retained, and benefits are provided for certain defense goods, in particular components for supporting the Defense Forces.

Why a separate customs law was needed

The adopted draft law No. 15460 amends the Customs Code and defines the procedure for clearance of goods arriving in Ukraine in international postal and express shipments.

While the tax law establishes the rules for charging and paying VAT, the customs document ensures the mechanism for their practical application during the importation of goods.

In particular, the changes provide for the adaptation of customs procedures to the new system of distance trade, information exchange and interaction with operators of international shipments.

Minister of Finance Serhiy Marchenko previously explained that without the corresponding customs mechanism, the new tax rules would not be able to work fully.

According to Zheleznyak, after the adoption of the second document, the parliament effectively completed all necessary voting on the taxation of international parcels.

When the new rules will come into effect

Despite the final adoption of the legislative package, parcels up to 150 euros will not start being taxed under the new rules immediately.

According to the position of the Ministry of Finance, the provisions of the Tax and Customs Codes should come into force no earlier than July 1, 2027.

The postponement is necessary for the development and implementation of information systems through which marketplaces, customs and tax authorities will administer payments.

Until the launch of the new model, the current rules for taxation of international parcels will continue to apply.

Why the parliament could not adopt the changes several times

The introduction of VAT on international parcels caused lengthy debates in the Verkhovna Rada. The previous version of the tax reform, registered under No. 15112-d, did not receive the necessary support from deputies.

In particular, on September 1, only 198 MPs voted for its adoption in the first reading, while 226 were needed. It was also not possible to get enough votes for alternative procedural decisions.

After that, the package of documents was revised and re-submitted to parliament. On September 16, deputies supported the tax and customs draft laws in the first reading.

Consideration of numerous amendments to the tax document lasted several sessions. On October 14, the parliament did not complete this procedure, and the final votes were taken on October 15.

Adoption of laws is important for international financing

The reform of taxation of international parcels is part of Ukraine's commitments under cooperation with the International Monetary Fund and conditions for receiving macro-financial support from the European Union.

According to the Ministry of Finance, the timely adoption of the package of draft laws is necessary to receive about 4 billion euros of international financial assistance for the needs of the state budget.

Thus, the completion of voting removes one of the key legislative obstacles to further financing. At the same time, the fact of adopting the laws does not mean automatic transfer of funds: the decision on their allocation is taken by international partners after verifying the fulfillment of the relevant conditions.

The Ministry of Finance also expects that after the launch of the new system, additional revenues from parcel taxation will amount to about 10 billion UAH per year.

Funds from VAT on remote sales of goods are planned to be directed to a special fund of the state budget for the needs of the Armed Forces of Ukraine.

Amendment on PEP and other financial obligations

Along with the tax changes, the parliament kept in draft law No. 16051-1 an amendment on financial monitoring of politically exposed persons (PEP).

According to Zheleznyak, it was not put for separate confirmation, so it remained in the finally adopted document.

The amendment concerns the application of a risk-based approach to checks of former senior officials. After the first year of enhanced monitoring, financial institutions should assess individual risks and apply additional control measures according to their level.

This does not mean automatic loss of PEP status one year after leaving office.

According to Zheleznyak, the adoption of this amendment also removes an obstacle to signing the previously adopted law No. 15111-d on taxation of income through digital platforms, which for a long time remained unsigned due to contradictions around financial monitoring.

At the same time, the deputy criticized parliament for the lack of votes on anti-corruption reforms. According to him, this week the Verkhovna Rada did not consider any of the ten draft laws included in his proposed anti-corruption package, and the draft anti-corruption strategy was removed from consideration.

Zheleznyak emphasized that fulfilling tax obligations is important for international financing, but to receive other amounts of assistance, Ukraine needs to continue anti-corruption and institutional reforms.

Based on: Yaroslav Zheleznyak, Verkhovna Rada - draft law No. 16051-1, Verkhovna Rada - draft law No. 15460