Ukraine's parliament adopts law ending VAT exemption for foreign marketplace parcels

Why it matters

The law ends Ukraine's longstanding role as a tax-free import channel for low-value goods from marketplaces such as AliExpress, Temu, and Amazon. Adoption is a formal condition for unlocking an IMF tranche of about $700 million and a €3.7 billion EU macro-financial assistance tranche, tying domestic tax policy directly to external financial support. The change also aligns Ukraine's treatment of low-value imports with EU customs and VAT rules. Because the rules cannot take effect before 1 July 2027, the government and platforms have time to set up the compliance infrastructure. According to the Ministry of Finance, around 75 million parcels are processed in Ukraine annually, with VAT currently paid on less than 1% of them.

What happened

On 15 October, the Verkhovna Rada adopted draft law No. 16051-1 in its second reading and as a whole, with 252 votes in favour and three against. The bill amends the Tax Code of Ukraine and cancels the VAT exemption for international postal shipments valued at up to €150, introducing 20% VAT on goods purchased through foreign online marketplaces regardless of value. For online purchases priced up to €150, the tax will be calculated and paid by the electronic platform itself or its intermediary, not by the buyer. Non-commercial parcels valued up to €45 sent free of charge between individuals remain exempt from VAT, as do certain goods intended for Ukraine's security and defence needs.

The bill had a turbulent path: it failed in its first reading on 1 September (194 votes), passed a repeat vote with 216, and was eventually approved in first reading on 16 September with 273 votes in favour. On 6 October the relevant parliamentary committee recommended adoption in the second reading and as a whole.

The package is tied to Ukraine's commitments to the IMF and the EU under the Ukraine Facility programme and other international support mechanisms. The Ministry of Finance estimates the new model could bring around 10 billion hryvnias in additional annual budget revenue, planned for the needs of the Armed Forces. For the law to function, related amendments to the Customs Code (draft law No. 15460) still need to be adopted. Ukraine plans to require foreign marketplaces to establish registered representative offices in the country that will act as the entities physically paying the tax.

How Ukrainian sources describe it

Ukrainian coverage centres domestic fiscal politics, framing the law as part of Ukraine's commitments to the IMF and the EU and as a step toward alignment with European tax and customs rules. Reports highlight the initiative of parliamentary finance committee chair Danylo Hetmantsev and quote him saying the goal is additional revenue for the armed forces. Outlets detail the procedural path: failure on 1 September, a narrow repeat vote, eventual approval in first reading on 16 September with 273 votes, and final second-reading adoption on 15 October with 252 in favour and three against. Several articles draw attention to an amendment, attributed to MP Olena Shuliak, reducing personal income tax for landlords from 18% to 5% (with the 5% military levy remaining). The Ministry of Finance is quoted disputing criticism from Nova Poshta co-founder Volodymyr Popereshniuk, who warned the tax would harm the economy and burden virtually every Ukrainian. A separate amendment within the bill cancels norms that had weakened enhanced financial monitoring of politically exposed persons, unblocking the signing of the related digital-platform tax law (draft No. 15460).

Where reporting differs

Sources diverge on several details. Most reports say 252 MPs voted in favour of the bill in the second reading, but one ZN.UA article gives 255. On the date of the successful first-reading vote, most sources say 16 September with 273 votes in favour, while one ZN.UA article gives 16 October, and another source suggests 16 September was when the package was adopted as a whole rather than in first reading. On the effective date of the new rules, most sources specify no earlier than 1 July 2027 and only after a government decision; one article (ЛІГА.net LB.ua) gives 1 January 2027, and others (including Бабель) say only 'the following year' without a specific date. On whether the final adopted text retains the VAT exemption for non-commercial parcels up to €45 sent free of charge between individuals, most sources say yes, but one ZN.UA article says it is still unclear.

Background

Under the previous regime, imported goods valued at up to €150 sent as international postal shipments were exempt from VAT in Ukraine, a longstanding loophole that made the country a tax-free import channel for low-value goods from platforms such as AliExpress, Temu, and Amazon. The package is part of a broader 'large' tax package linked to obligations to the IMF and the EU, including commitments under the Ukraine Facility programme. Ukraine plans to require foreign marketplaces to establish registered representative offices in the country that will calculate and remit the VAT, rather than collecting it from buyers. A related amendment within the draft law cancels earlier provisions that had weakened enhanced financial monitoring of politically exposed persons (PEPs), a change European Commission partners had been pressing for and that unblocks signing of a separate digital-platform tax law (draft No. 15460). The draft law also incorporates an amendment attributed to Olena Shuliak reducing the personal income tax rate for individuals renting out housing from 18% to 5%, while keeping the 5% military levy.