“A Matter of Economic Justice”: Businesses Call for the Repeal of the VAT Exemption on Parcels
30 April 19:27
The European Business Association has appealed to members of parliament to adopt a bill amending the Tax Code to abolish the VAT exemption on international parcels. This is stated on the association’s official website, according to "Komersant Ukrainian".
“The issue of abolishing the VAT exemption for international shipments (parcels) is not merely a tax issue: ‘This is a matter of economic justice, the survival of Ukrainian businesses, and defense funding,'” the business community noted.
The business community emphasizes that the current exemption creates tax distortions in the market, encourages tax evasion, and worsens competitive conditions for Ukrainian companies. This is also a matter of Ukraine fulfilling its obligations to align tax and customs legislation with EU legislation, the European Business Association emphasized.
This is also a matter of Ukraine fulfilling its commitments to align its tax and customs legislation with EU legislation, the European Business Association emphasized.
They noted that the European Union abolished similar exemptions back in 2021, recognizing them as a source of fiscal losses and market distortions. Given this, Ukraine cannot declare a course toward European integration while simultaneously maintaining regulations that directly contradict the European model. Starting July 1, 2026, the EU will even abolish the duty exemption for such goods.
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The Association has repeatedly supported the Cabinet of Ministers in this initiative and appealed to parliamentarians regarding the need to abolish the exemption for parcels valued at up to 150 euros.
“This VAT exemption is quite often exploited by unscrupulous operators who split large industrial shipments into small parcels to avoid VAT, then sell these goods tax-free online or at markets for cash. Honest Ukrainian businesses that pay all taxes are forced to compete with goods that enter the country without any taxation. Moreover, official importers bear the additional burden of warranty service for such goods and advertising,” the appeal states.
Key arguments from the business community
- International parcels are often imported without paying VAT
- Unscrupulous players split shipments to avoid taxation
- official businesses compete with cheaper, untaxed imports
- The budget loses significant revenue every year
According to estimates by think tanks, the volume of international tax-free postal and express shipments reached approximately 93 billion UAH in 2025. At the same time, over 56% of such shipments were not taxed, resulting in significant losses for the budget.
The EBA notes that budget losses for the year will amount to at least 18.6 billion UAH, and cumulative losses since the start of the full-scale war—over 43 billion UAH. Businesses predict that in 2026, the budget will lose up to 27 billion UAH in revenue.
Business Position
The European Business Association insists on:
- the official publication of the final draft of the bill
- the inclusion of a provision on the abolition of the VAT exemption in the text
- the immediate consideration and adoption of the amendments by parliament
The business community notes that harmonizing tax rules is critical for fair competition, reducing shadow imports, and ensuring stable budget revenues, particularly during wartime.
As a reminder, Ukraine’s previous agreements with the International Monetary Fund regarding new financing require the adoption of a law expanding taxation on parcels.
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