Tax and сustoms reforms and digitalisation: Business meets with Danylo Hetmantsev

On 12 June, representatives of the European Business Association met with Danylo Hetmantsev, Chair of the Verkhovna Rada Committee on Finance, Tax and Customs Policy. The participants discussed key areas of fiscal policy, legislative initiatives, and challenges faced by the business community.

The main focus was on the need to reform the tax and customs systems, digitalise tax reporting, reduce the shadow economy, and improve the overall business climate in Ukraine.

Key topics discussed included:

• Plans through 2025: The government’s immediate priorities are launching tax and customs reforms. Once these are implemented, broader tax changes aligned with EU standards are expected.

• Legislative initiatives: Current focus areas include the banking sector (factoring, financial inclusion, credit history, deposit guarantees) and the DAC7 initiative, which is undergoing final adjustments.

• Personal Income Tax (PIT): The government does not support accounting for exchange rate differences in the taxation of income.

• E-reporting and audit: The SAF-T e-audit software was not launched on schedule, making it difficult for businesses to adapt to new reporting requirements. In 2025, the Parliamentary Committee plans to collect proposals and amend tax legislation and the Law on Accounting accordingly. Mr Hetmantsev encouraged companies to sign memoranda with the State Tax Service to help prepare and test their SAF-T file generation systems.

• Tax pressure and audits: Businesses voiced concerns over excessive fiscal pressure during inspections. Official statistics show that the majority of tax assessments are overturned in court, but tax authorities do not always comply with legally binding court decisions in a timely manner. The reform of the simplified taxation system was also discussed.

• Royalties and digital services: Business representatives proposed amending the definition of “royalty” in the Tax Code, particularly in the telecommunications sector, to avoid inconsistent interpretations by tax authorities.

• VAT and exemptions: The proposal to reduce VAT on food products is not supported due to budget constraints. The cancellation of VAT exemptions for international parcels was also discussed. While the business community supports the initiative, it will require majority backing in Parliament.

• Transfer Pricing (TP): The Parliamentary Committee does not support increasing the TP thresholds but is working towards harmonising the legislation with European standards.

• Licensing of excisable goods: Amendments to Law No. 3817 on licensing excisable goods were discussed to improve transparency in the import and export of excisable products.

• Market de-shadowing: Topics included combating illegal alcohol trade, grey imports of household appliances, and the implementation of an electronic excise system.

The European Business Association extends its gratitude to Mr Hetmantsev for an open discussion and willingness to engage in dialogue with the business community. Through joint efforts, we aim to build a stable, transparent, and predictable tax environment in Ukraine.