Aug
Ukraine to remove low value import VAT exemption for goods under EUR 150
Who this will interest: Businesses selling goods to consumers in Ukraine with values below EUR 150;
Key point(s): Ukrainian VAT will apply on goods imported into Ukraine from abroad where the value of the parcel is less than EUR 150;
Essentia’s take: The proposed changes will address the growing number of parcels imported into Ukraine that are not taxed and bring Ukraine in line with the European Union and other countries taxing low value consignments;
Action points: Businesses selling goods directly to Ukrainian customers from abroad should prepare for the application of Ukrainian VAT on their sales. The rules should be reviewed beforehand as in some cases it is not the seller that needs to account for the VAT.
In detail
Ukraine intends to remove the current VAT exemption that applies on the import of goods with a value of less than EUR 150. Under the new rules the seller is expected to account for the VAT on the sale. If the sale is facilitated by a marketplace then the responsibility to calculate and remit the VAT will sit with the marketplaces.
The information provided by the Ukrainian Ministry of Finance also mentions that C2C parcels (consumer to consumer) will be exempt from VAT as long as their value is below EUR 45.
VAT exemptions will remain in place for particular types of goods, especially those related to the defence sector (e.g. drones and their components).
The measure is meant to take effect from January 1, 2027, however during the during the first year, administrative penalties will not be applied to operators for unintentional errors regarding incomplete or late VAT payments on parcels under 150 euros, provided the tax is eventually paid in full.
Impact on businesses
Businesses selling to Ukrainian consumers should consider their pricing strategy given that their goods will be more expensive once VAT will start to apply. Additionally, they should prepare for these changes and ensure they can comply with the new rules from 1 January 2027.