Bill No. 16051-1 Ends VAT Exemption for Low-Value International Shipments
The Verkhovna Rada of Ukraine has approved in its first reading Bill No. 16051-1, which eliminates the VAT exemption on international packages valued up to €150. The measure received support from 273 lawmakers. This legislation is part of Ukraine’s commitment to meet tax reform conditions tied to extending its International Monetary Fund (IMF) credit program. It is the second out of three crucial tax bills that must be passed by the end of March 2026.
Under this proposal, a 20% VAT rate will be applied to international parcels sent to private individuals in Ukraine from abroad. Finance Minister Serhiy Marchenko emphasized the urgency of passing the law, warning that delays could risk losing €4 billion in international financial aid as early as September. Previous attempts by parliament to adopt this bill had failed twice.
Allocation of Funds and Implementation Timeline
Revenues generated from the new VAT will be directed to a dedicated state budget fund supporting the Armed Forces of Ukraine. The government anticipates the tax will raise approximately 10 billion UAH annually. The new rules will take effect 45 days after the Cabinet of Ministers confirms the readiness of administrative systems, but no earlier than July 1, 2027.
The legislation exempts VAT on non-commercial shipments between individuals valued up to €45 and goods in unaccompanied baggage up to €150, excluding excisable items. Additionally, products related to security and defense—such as energy equipment and military supplies—will remain VAT-free. The responsibility to calculate and remit the tax falls on foreign marketplaces and online platforms, or their authorized Ukrainian intermediaries.
This bill represents a critical step toward stabilizing Ukraine’s finances amid ongoing economic challenges and fulfilling obligations to international creditors. The new VAT is expected not only to boost state revenues but also to strengthen support for Ukraine’s military during active conflict. The reform is part of a broader fiscal strategy aimed at improving the country’s financial health.
For international observers, this change reflects Ukraine’s efforts to align its tax policies with global standards and secure vital external funding during a period of heightened geopolitical tension.
As Ukraine navigates significant tax reforms, the recent approval of a VAT on low-value international parcels aligns with broader regulatory changes. This follows the government's earlier decision to implement VAT on imported packages starting from zero euros, establishing new marketplace guidelines for shipments valued under €150. For a comprehensive understanding of these evolving regulations, consider exploring the details in our article about new marketplace rules for shipments.