Tax Breaks on International Parcels Scrapped by Ukrainian Government: VAT Now Applies from the Very First Cent.

Draft Laws from Ukraine's Cabinet of Ministers

According to TSN.ua: On March 30, 2023, Ukraine’s Cabinet of Ministers approved three legislative proposals targeting the taxation of digital platforms, cross-border parcels, and an extension of the military levy. A central piece among them is Draft Law No. 15112, which mandates that starting January 1, 2027, Value Added Tax will be imposed on all goods imported into the country, regardless of their price. Currently, parcels valued at up to 150 euros can enter Ukraine free of customs duties and VAT.

Updated Taxation Framework

Under the new regime, VAT will be levied on every item from the first cent of its value. However, the parcel exemption does not apply to shipments containing:

• excise goods;
• perfumes (over 50 g);
• cologne (over 0.25 L);
• coffee (over 500 g);
• tea (over 100 g).

Estimates suggest the fiscal impact of these changes will amount to roughly 12 billion UAH annually. Additionally, from June 1, 2026, a fixed fee of 3 euros will apply to small parcels worth up to 150 euros. These adjustments mirror similar practices in the European Union, which eliminated the VAT exemption for imports under 22 euros as of July 1, 2021.

The adoption of these draft laws signals a shift in Ukraine’s approach to taxing imported goods—a move that could reshape the consumer market and alter importer behavior. By ending previously existing benefits, the new rules may drive up prices for certain products that fall under the updated regulations. At the same time, introducing a flat fee for small parcels aligns with broader efforts to harmonize tax policies with European standards, potentially bolstering budget stability amid ongoing economic challenges.