The Verkhovna Rada Committee on Finance, Tax and Customs Policy has for the third time recommended that Parliament adopt two related draft laws on the taxation of small postal and express shipments worth up to €150 ordered through marketplaces. The documents provide for the abolition of the tax exemption for parcels worth up to €150. UNN reports this, citing a committee meeting.
Details
The committee recommended that the Verkhovna Rada adopt draft law No. 15460, "On Amendments to the Customs Code of Ukraine Regarding the Specifics of Customs Formalities for Goods Moved (Sent) Across the Customs Border of Ukraine in International Postal and Express Shipments," as well as draft law No. 16051-1, "On Amendments to the Tax Code of Ukraine Regarding the Specifics of Value Added Taxation of Transactions Involving the Distance Sale of Goods Moved (Sent) Across the Customs Border of Ukraine in International Postal and Express Shipments," as a basis and in their entirety.
Additional information
On Tuesday, September 1, the Verkhovna Rada once again failed to pass the draft laws abolishing the tax exemption for parcels worth up to €150. The two draft laws in question are Nos. 15460 and 15112-d.
Draft law No. 15460 introduced amendments to the Customs Code of Ukraine (which regulates customs procedures, border-clearance rules and the €150 threshold for import duty).
Under the draft law, VAT on imported goods purchased through marketplaces was to be introduced starting from €0.
Currently, international shipments worth up to €150 are not subject to import VAT or import duty. Under the proposed rules, the threshold itself would remain, but its effect would change: goods worth up to €150 would be exempt from duty only. Thus, VAT at the standard rate of 20% would be charged starting from the first euro of the value of the goods.
For shipments worth more than €150, the basis for calculating the duty would change. It would be charged at a rate of 10% of the parcel’s entire invoice value, rather than only on the amount exceeding €150.
At the same time, private unsolicited gifts worth up to €45 were also expected to remain exempt from taxation. The new rules would not apply to the distance sale of alcohol and tobacco.
Requirements were to be introduced for the record-keeping of marketplaces and their representatives in Ukraine (for non-resident marketplaces), as well as a special guarantee for the use of the distance-sale scheme.
A transitional period is предусмотрено for postal operators, express carriers and marketplaces to adapt. During the first year, administrative liability would not apply for unintentional errors related to the incomplete or late payment of VAT on parcels worth up to €150, provided that the tax itself is paid in full.
Draft law No. 15112-d, "On Amendments to the Tax Code of Ukraine Regarding the Taxation of E-Commerce Transactions with Value Added Tax," was intended to amend the Tax Code of Ukraine (which establishes the rules for assessing and paying VAT on e-commerce and parcels).
The revised draft law No. 15460 underwent almost no changes. On September 7, the government approved draft law No. 16051, which was approved by the government instead of No. 15112-d. In addition to the provisions set out in draft law No. 15112-d, the document provides for bringing the rules concerning politically exposed persons (PEPs) into line with the wording agreed upon with the EU.
Thus, according to the draft law, if a politically exposed person ceases to perform prominent public functions, banks must continue to take into account the person’s ongoing risks for at least twelve months from the day following the day on which that person ceased to perform prominent public functions.
At the same time, the entity conducting primary financial monitoring must take into account the risks that remain inherent to the politically exposed person, including:
- the level of influence the person may still have;
- the scope of powers with which the person was vested;
- the connection between past and current powers, etc.
After at least twelve months have elapsed since the date on which a person ceased performing prominent public functions, the subject of primary financial monitoring must continue taking measures until it establishes that business relations with such a person do not pose the risks inherent to politically exposed persons.
The proposed effective dates have also been changed: the provisions of the Tax Code and the Customs Code are to take effect no earlier than July 2027. Previously, it was envisaged that they would take effect on January 1, 2027.
Verkhovna Rada has once again failed to pass the tax on parcels worth up to €15001.09.26, 13:40
It should be noted that on June 9, the Verkhovna Rada adopted as a whole draft law No. 15111-d on the taxation of digital platforms. On June 11, it was signed by Verkhovna Rada Chairman Ruslan Stefanchuk, and on June 12, it was sent to President Volodymyr Zelenskyy for signature, after which the document has been "stuck" with the head of state.
The fact is that during the second reading, a provision was submitted to the document envisaging changes to the financial monitoring system for politically exposed persons. It was included in the draft by the relevant committee and subsequently supported by the parliamentary chamber.
PEPs include current and former top officials: from members of parliament, ministers, and the president to heads of law enforcement agencies, members of the NBU Board, and ambassadors.
Draft Law No. 16051 provides for removing heads of structural divisions of the central office of the National Bank of Ukraine and employees responsible for conducting financial monitoring of a bank in which more than 50 percent of the shares in the authorized capital are owned by the state from the list of public figures.
Under the law, banks and other financial companies are required to conduct enhanced financial monitoring of PEPs, their close relatives, and business partners.
PEP status is lifelong. At the same time, enhanced financial monitoring applies throughout a person's tenure in a top position and for 12 months after their dismissal. However, banks and other financial institutions may continue to conduct enhanced checks on a PEP if they believe that the person remains high-risk.
The amendments to the draft law introduce penalties for banks that decide to continue enhanced monitoring of a PEP's transactions after 12 months have elapsed since the person's dismissal from a top position.
According to some members of parliament, it is precisely because of this amendment that Zelenskyy has still not signed the aforementioned draft law. Finance Minister Serhii Marchenko stated that President Volodymyr Zelenskyy has still not signed the law on taxing income from digital platforms, adopted back in June, because during its consideration, lawmakers introduced an amendment concerning changes to the financial monitoring of politically exposed persons.
At the same time, an alternative draft law No. 16051-1 was submitted yesterday to government draft law No. 16051; it repeals the provisions concerning PEPs.
As already noted, it was this draft law that the committee recommended. It should be noted that the alternative document also provides that taxes on parcels will be credited to the special fund of the State Budget of Ukraine and directed toward meeting the needs of the Armed Forces of Ukraine.
Rada approves tax on income from digital platforms as part of IMF package09.06.26, 13:55