Ukraine's PM: 80% of foreign parcels were tax-dodging shipment splitting
Ukraine's Prime Minister Serhii Marchenko... [see body] explained why the government backs applying VAT to international parcels, saying 80% of such duty-free shipments were actually large orders split into smaller ones to dodge taxes and undercut domestic producers.
Ukrainian Prime Minister Serhii Koretskyi has explained why the government supports a bill imposing VAT on international parcel deliveries, saying in an interview with the 1+1 TV channel that around 80% of such VAT-exempt shipments were in fact a scheme by dishonest traders to split large orders into smaller parcels and avoid taxation.
Harm to domestic producers
The prime minister said this practice has hurt Ukrainian manufacturers, who already face difficult operating conditions, including reliance on diesel generators amid power shortages, which makes electricity — and therefore production — more expensive than in Europe. Because of this, goods made in Ukraine end up costlier and are subject to VAT under current law. Meanwhile, parcels arriving from abroad, produced under peacetime conditions at lower cost, entered the country tax-free, creating what Koretskyi described as an unfair competitive advantage for foreign producers.
Legislative process
On September 16, Ukraine's parliament, the Verkhovna Rada, approved in its first reading bills imposing VAT on e-commerce and international parcels. Under the proposed rules, parcels valued up to 150 euros — previously exempt — would become subject to VAT.
Passage of the bill is also a condition for Ukraine to receive $700 million under an International Monetary Fund program, as well as 3.7 billion euros as part of a 90-billion-euro loan from the European Union. The prime minister thanked lawmakers for supporting the bill and said a second reading would follow soon.
If adopted, the new rules could take effect no earlier than July 1, 2027, and only following a separate government decision.
