Abolishing the parcel tax exemption and simplifying product labelling — 2 ways to support business

27/ 08/ 2026

Listen to online Stop   On 26 August, the Verkhovna Rada Committee on Finance, Tax and Customs Policy supported a draft law on abolishing the VAT exemption for international parcels. The European Business Association welcomes this decision and hopes for the documents further support in parliament. Business continues to operate despite intensifying Russian attacks on logistics and warehouse infrastructure. Under these conditions, companies need, above all, equal and transparent rules of the game from the state. The current preferential taxation of parcels is frequently exploited by unscrupulous players: industrial batches of goods are split into numerous small shipments, allowing them to avoid paying VAT. Such goods can then be sold without paying taxes, either online or for cash at markets. As a result, honest companies find themselves at a competitive disadvantage against goods that effectively enter the market untaxed. At the same time, business needs additional tools to restore operational activity. In particular, this concerns simplifying product labelling requirements. Due to enemy attacks, some companies have lost the main customs warehouses where product labelling was previously carried out. It is not always possible to carry out these operations in Ukraine at present, while setting up labelling processes abroad takes additional time and is significantly more expensive. That is why the Association is asking for a temporary simplification of customs control: suspending labelling checks under sectoral plans and permitting the import of goods with EU labelling (including medicinal products registered in Ukraine). At the start of the full-scale war, a simplification of product labelling requirements was already introduced, which allowed business to adapt to the new conditions. The Association is therefore calling for this approach to be reapplied until the relevant infrastructure in Ukraine is restored. In the view of the business community, abolishing the parcel exemption and temporarily simplifying labelling requirements could become two practical steps by the state towards affected companies. The Association has already approached the Government previously regarding these and other business support measures — details are available via the link.

On 26 August, the Verkhovna Rada Committee on Finance, Tax and Customs Policy supported a draft law on abolishing the VAT exemption for international parcels. The European Business Association welcomes this decision and hopes for the document’s further support in parliament.

Business continues to operate despite intensifying Russian attacks on logistics and warehouse infrastructure. Under these conditions, companies need, above all, equal and transparent rules of the game from the state.

The current preferential taxation of parcels is frequently exploited by unscrupulous players: industrial batches of goods are split into numerous small shipments, allowing them to avoid paying VAT. Such goods can then be sold without paying taxes, either online or for cash at markets. As a result, honest companies find themselves at a competitive disadvantage against goods that effectively enter the market untaxed.

At the same time, business needs additional tools to restore operational activity. In particular, this concerns simplifying product labelling requirements.

Due to enemy attacks, some companies have lost the main customs warehouses where product labelling was previously carried out. It is not always possible to carry out these operations in Ukraine at present, while setting up labelling processes abroad takes additional time and is significantly more expensive.

That is why the Association is asking for a temporary simplification of customs control: suspending labelling checks under sectoral plans and permitting the import of goods with EU labelling (including medicinal products registered in Ukraine).

At the start of the full-scale war, a simplification of product labelling requirements was already introduced, which allowed business to adapt to the new conditions. The Association is therefore calling for this approach to be reapplied until the relevant infrastructure in Ukraine is restored.

In the view of the business community, abolishing the parcel exemption and temporarily simplifying labelling requirements could become two practical steps by the state towards affected companies.

The Association has already approached the Government previously regarding these and other business support measures — details are available via the link.