Ukraine to move heavily abused VAT exemption, following EU plans
Ukraine is preparing to abolish its VAT exemption for imported parcels valued under €150 from 2027, in a major reform aimed at tackling tax avoidance.
It will aligning with European Union e-commerce VAT rules introduced in 2021 e-commerce package.
Under draft laws No. 15112-D and No. 12360, foreign marketplaces and electronic platforms will become responsible for collecting 20% VAT at the point of sale on low-value imports. The reforms mirror the EU’s 2021 Import One Stop Shop (IOSS) regime, which similarly removed the VAT exemption for consignments under €150.
Ministry of Finance seeks to raise UAH 10bn
The Ukrainian Ministry of Finance says the current rules enable widespread “fragmentation” schemes, where commercial consignments are artificially split into multiple small parcels to avoid import VAT. Today, fewer than 1% of Ukraine’s estimated 75 million annual parcels are taxed. The government estimates the reform could raise approximately UAH 10 billion annually for the state budget.
The legislation also distinguishes between commercial imports and genuine private gifts. Citizen-to-citizen parcels under €45 will remain VAT exempt, provided they are free of charge and not intended for resale.
Importantly, the VAT obligation will fall on marketplaces rather than consumers. Platforms will automatically include VAT in the purchase price, with customs clearance expected to remain largely automated through digital data exchange between marketplaces, postal operators, and customs authorities.
