The “Grand Tax Law” has been split into several bills. What is it about?
30 March 15:28
Today, the Cabinet of Ministers approved three draft laws developed by the Ministry of Finance. These concern the extension of the military levy, as well as the taxation of international parcels and digital platforms. Ukrainian Finance Minister Serhiy Marchenko wrote about this on Facebook, according to "Komersant Ukrainian".
The bills in question are:
- regulation of taxation of income received through digital platforms and the introduction of international information exchange (DAC7);
- taxation of international parcels starting at 0 euros;
- the extension of the military levy after the end of martial law.
“This is part of the government’s systematic efforts to de-shadow the economy, ensure equal and fair competitive conditions, and meet the state’s key funding needs in the post-war period,” the finance minister added.
He also noted that the issues of taxing digital platforms and international parcels were developed in close consultation with businesses, industry associations, and experts.
According to him, dozens of consultations were held, resulting in the incorporation of a number of constructive proposals, and a consolidated position has now been formed regarding the need to implement transparent and predictable rules.
These changes are part of Ukraine’s fulfillment of its commitments within the framework of its European integration course.
Details of the draft law on banks and digital platforms
The draft laws 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 DAC7 Directive.
The Ministry proposes introducing a taxation mechanism for individuals who receive income through digital platforms. The personal income tax rate will be 5% instead of the current 18%.
“In this case, the platform itself will act as the tax agent, which significantly simplifies administration for citizens. It is important that one-time, non-commercial sales of personal items will not be subject to taxation if the annual income from such transactions does not exceed 2,000 euros,” explained Marchenko.
According to him, this approach also reduces the tax burden on self-employed individuals, encourages voluntary income reporting, and promotes the formalization of the economy.
Participants in the digital platform market publicly support the introduction of uniform rules, the minister says.
The proposed changes will take effect on January 1, 2027.
Bill on the taxation of international shipments
The proposed changes provide for the application of VAT to international shipments regardless of their value, following a model already in effect in European Union countries.
VAT will be calculated automatically and included in the cost of the goods at the time of purchase on the e-commerce platform. At the same time, the tax exemption for non-commercial shipments valued at up to 45 euros remains in place. Implementing these changes will level the playing field and reduce the volume of “gray” imports, Marchenko explained.
Bill on the extension of the military levy
“Extending the military levy beyond the end of martial law is a necessary step dictated by the war. This decision is driven by the fact that the needs of the security and defense sectors will remain significant, as well as the need to finance the country’s reconstruction,” added Marchenko.
According to the latest estimates, the cost of rebuilding Ukraine is approximately $588 billion. Meanwhile, the bill on VAT for certain sole proprietors is currently in the coordination and finalization stage and will be submitted for approval in the near future.
What about VAT for sole proprietors?
There is currently no draft bill on the introduction of VAT for sole proprietors among the documents. The Cabinet of Ministers plans to approve it separately and submit it to the Rada a little later.
“The draft law on VAT for certain sole proprietors is currently being coordinated and finalized with central government agencies and will be submitted for approval in the near future,” Marchenko wrote.
As a reminder, in February, the International Monetary Fund lifted the preconditions for Ukraine’s new $8.1 billion loan program. These included requirements regarding VAT for sole proprietors, customs duties on parcels, a tax on digital platforms, and a military levy.
Regarding VAT for sole proprietors, an agreement has been reached to raise the threshold for its application from 1 million to 4 million hryvnias. As a result, it will affect not 660,000 small business owners, but 257,000.
