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The EBA supports abolishing tax exemptions for imports worth up to €150 while simplifying customs clearance procedures

17/ 01/ 2025
  The European Business Association advocates for the cancellation of VAT exemptions on imported goods valued up to €150. This position was outlined in an official letter addressed to the Chairman of the Verkhovna Rada Committee on Finance, Taxation, and Customs Policy, Danylo Hetmantsev. The EBAs stance stems from concerns that current regulations allow significant opportunities for dishonest entrepreneurs to evade VAT payments. Examples include splitting orders into multiple parcels, misdeclaring goods’ value, or importing industrial quantities of goods as accompanied or unaccompanied luggage. According to a study by the Institute for Social and Economic Transformation, 81 individuals among the top 100 recipients of international postal deliveries collectively received 18,765 parcels over the first nine months of 2024—averaging 232 parcels each. None of these parcels exceeded €150 in value and were, therefore, VAT-exempt. As a result, an individual could import goods worth up to €4,500 per month without taxation by receiving just one parcel daily. This essentially represents industrial quantities of goods exempt from taxation. The EBAs experts argue that the current preferential tax regime for small consignments distorts competitive conditions in the domestic market, creating more favorable tax and customs terms for foreign manufacturers and marketplaces. Moreover, this tax exemption deprived the state budget of at least UAH 11.8 billion in VAT revenue in 2024. Customs duties on these goods could have generated at least half that amount in additional revenue. Additionally, Ukraine is gradually aligning its tax and customs legislation with European Union standards. In the EU, VAT exemptions for low-value parcels (up to €22) were abolished in 2021, and customs payment regulations are being refined, trending toward mandatory declarations for all parcels regardless of value. EBA member companies report that this has significantly increased VAT revenue in EU countries and enhanced tax revenues from residents, giving them a competitive edge over foreign marketplaces. At the same time, EBA experts recognize the need to simplify customs clearance procedures for parcels subject to taxation to avoid delivery delays to Ukraine. It is particularly important to ensure the uninterrupted import of goods for Ukraines defense forces. The EBA has participated in drafting legislation for the Verkhovna Rada Committee on Finance, Taxation, and Customs Policy, contributing feedback on simplifying customs clearance procedures, establishing effective control mechanisms to prevent abuse by dishonest businesses, and setting clear implementation timelines. EBA experts will carefully review the draft laws once published and, if necessary, contribute to their refinement to prevent abuses while ensuring maximum simplification of cross-border ordering for citizens and defense forces alike.

The European Business Association advocates for the cancellation of VAT exemptions on imported goods valued up to €150. This position was outlined in an official letter addressed to the Chairman of the Verkhovna Rada Committee on Finance, Taxation, and Customs Policy, Danylo Hetmantsev.

The EBA’s stance stems from concerns that current regulations allow significant opportunities for dishonest entrepreneurs to evade VAT payments. Examples include splitting orders into multiple parcels, misdeclaring goods’ value, or importing industrial quantities of goods as accompanied or unaccompanied luggage.

According to a study by the Institute for Social and Economic Transformation, 81 individuals among the top 100 recipients of international postal deliveries collectively received 18,765 parcels over the first nine months of 2024—averaging 232 parcels each. None of these parcels exceeded €150 in value and were, therefore, VAT-exempt. As a result, an individual could import goods worth up to €4,500 per month without taxation by receiving just one parcel daily. This essentially represents industrial quantities of goods exempt from taxation.

The EBA’s experts argue that the current preferential tax regime for small consignments distorts competitive conditions in the domestic market, creating more favorable tax and customs terms for foreign manufacturers and marketplaces. Moreover, this tax exemption deprived the state budget of at least UAH 11.8 billion in VAT revenue in 2024. Customs duties on these goods could have generated at least half that amount in additional revenue.

Additionally, Ukraine is gradually aligning its tax and customs legislation with European Union standards. In the EU, VAT exemptions for low-value parcels (up to €22) were abolished in 2021, and customs payment regulations are being refined, trending toward mandatory declarations for all parcels regardless of value. EBA member companies report that this has significantly increased VAT revenue in EU countries and enhanced tax revenues from residents, giving them a competitive edge over foreign marketplaces.

At the same time, EBA experts recognize the need to simplify customs clearance procedures for parcels subject to taxation to avoid delivery delays to Ukraine. It is particularly important to ensure the uninterrupted import of goods for Ukraine’s defense forces.

The EBA has participated in drafting legislation for the Verkhovna Rada Committee on Finance, Taxation, and Customs Policy, contributing feedback on simplifying customs clearance procedures, establishing effective control mechanisms to prevent abuse by dishonest businesses, and setting clear implementation timelines.

EBA experts will carefully review the draft laws once published and, if necessary, contribute to their refinement to prevent abuses while ensuring maximum simplification of cross-border ordering for citizens and defense forces alike.

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