Cabinet approves draft laws on tax changes, introduction of VAT for individual entrepreneurs at stage of approval
The Cabinet of Ministers has approved the draft laws on tax changes.
Finance Minister Serhii Marchenko announced this on Facebook, the Ukrainian News agency reports.
We are talking about:
- regulation of taxation of income received through digital platforms and the introduction of international information exchange (DAC7);
- taxation of international parcels starting from 0 euros;
- continuation of military levy after the end of martial law.
The Minister noted that they are aimed at de-shadowing the economy, ensuring equal and fair conditions for competition, as well as the need to finance the key needs of the state in the post-war period.
The draft laws on digital platforms provide for the introduction in Ukraine of an international automatic exchange of information on income received through digital platforms in accordance with OECD standards and the EU Directive DAC7.
It is proposed to introduce a taxation mechanism for individuals who receive income through digital platforms. The personal income tax rate will be 5% (instead of 18%, which is currently in effect).
The platform itself will act as a tax agent, which greatly simplifies administration for citizens. Importantly, one-time, non-commercial sales of personal items will not be taxed if the annual income from such transactions does not exceed EUR 2,000. This is in line with the practices used in the EU.
The proposed changes will take effect from January 1, 2027.
According to the Minister, imports of goods in parcels of up to EUR 150 are currently not subject to VAT, which creates unequal competitive conditions: Ukrainian producers and retailers operate under a tax burden, while foreign sellers actually gain a price advantage. The proposed amendments envisage the application of VAT to such goods regardless of their value, following the model already in place in the European Union.
VAT will be charged automatically and included in the price of the goods at the stage of purchase on the electronic platform. At the same time, the tax exemption for non-commercial shipments worth up to EUR 45 (personal items and gifts) will remain in place. The implementation of these changes will help level the playing field and reduce the volume of gray imports.
The changes are also expected to come into effect in 2027.
The extension of the military fee after the end of martial law is a necessary step caused by the war.
The draft law on VAT for a part of individual entrepreneurs is currently being coordinated and finalized with the central executive bodies and will be submitted for approval in the near future.
As the Ukrainian News agency earlier reported, the International Monetary Fund has expressed concern about Ukraine's ability to continue receiving assistance from the USD 8.1 billion package, as the Verkhovna Rada is delaying the measures necessary to release funding.