New tax bills concerning parcels from abroad have been submitted for registration to the Verkhovna Rada. These proposals suggest the introduction of VAT on all orders from foreign stores and a new threshold for parcels exempt from taxes. This was reported on Telegram by the head of the financial committee of the Rada, Danilo Hetmantsev.
According to him, the texts of the bills have been fully developed by Ukrainian business associations. At their request, he submitted the documents for registration in parliament.
It is proposed to establish that:
- citizens can receive goods worth up to 45 euros without VAT taxation, provided that these goods are sent to their address by individuals without any payment and for non-commercial purposes
- goods purchased on foreign marketplaces and similar platforms will be subject to VAT regardless of their value. If the value of the goods exceeds 150 euros, additional import duties will be charged
In the first case, it refers to ordinary parcels sent from one individual to another. For instance, if a relative or acquaintance abroad sends you a parcel worth more than 45 euros, you will need to pay an additional 20% VAT.
In the second case, it pertains to purchases on foreign marketplaces. An additional 20% VAT is proposed to be charged on all orders. Currently, this rule applies only to parcels valued over 150 euros (which also incur a 10% import duty).
If the item is cheaper than 150 euros, only VAT will be charged. If it is more expensive, both VAT and import duty will apply.
Moreover, the bills propose to simplify VAT administration and expedite parcel processing at customs.
To achieve this, a mechanism similar to IOSS will be introduced, allowing VAT to be paid directly by the supplier of goods or the marketplace. It should be noted that this may lead to automatic price increases for buyers.
There is also a proposal to implement a customs declaration for low-value goods, similar to the N7 declaration in EU countries. The current forms for declaring parcels will still be usable.
Having the supplier or marketplace pay VAT will eliminate the need for additional customs payments from the buyer during customs clearance and will help expedite customs procedures.
Why the business community opposes the tax-free threshold of 150 euros
The MP also published a letter from the American Chamber of Commerce in Ukraine (ACC). It states that for a long time, experts from the member companies of the ACC have been working to strengthen the fight against shadow markets and competition distortion.
One of the key issues in the business community's focus is the abolition of the 150-euro limit on cross-border e-commerce, which would make all such parcels subject to VAT taxation.
They believe that having a tax-free threshold contributes to the growth of the shadow economy.
For its part, the European Business Association notes that the preferential tax regime for small shipments can lead to competition distortion in the domestic market. This is because foreign platforms are given more favorable tax and customs conditions compared to businesses in Ukraine.