The Ukrainian government has approved three significant tax reform bills aimed at regulating income from digital platforms and adjusting taxation on international shipments. Finance Minister Serhiy Marchenko announced the decision on March 30, emphasizing the need for these changes to support the country’s post-war economic recovery.
Among the proposed reforms is a new tax structure for individuals earning income through digital platforms. The legislation suggests a reduced personal income tax rate of 5%, down from the current 18%. The digital platforms themselves will act as tax agents, simplifying the tax process for users. Additionally, individuals will be exempt from taxation on one-time, non-commercial sales of personal items if their annual income from such sales does not exceed 2,000 euros.
Marchenko stated that these measures are part of a broader government strategy to formalize the economy and create a level playing field for competition. He noted that the reforms align with Ukraine’s commitments under its European integration agenda, which includes implementing standards set by the Organisation for Economic Co-operation and Development and the European Union’s DAC7 Directive.
The proposed changes to the Tax Code also aim to address the taxation of international shipments. Currently, goods imported in parcels valued up to 150 euros are exempt from value-added tax (VAT), which creates an uneven competitive landscape for local producers. The new legislation seeks to apply VAT to all imported goods, regardless of their value, similar to practices in EU countries. This tax will be automatically included in the purchase price during online transactions, although non-commercial shipments and gifts valued up to 45 euros will remain tax-exempt.
Marchenko explained that these adjustments are intended to reduce the tax burden on self-employed individuals, encourage voluntary income declaration, and combat the grey import market. He expressed confidence that the changes would foster a more predictable regulatory environment and enhance trust in the digital marketplace.
In addition to the reforms on digital platforms, the Finance Ministry proposed extending the military tax, citing ongoing security and defense needs. The estimated cost of rebuilding the country after the war is around $588 billion, necessitating sustained funding for these efforts.
Marchenko described the proposed legislation as crucial for establishing a fair tax environment and sending a clear message to international partners about Ukraine’s commitment to reform and macroeconomic stability. He urged lawmakers to support these important initiatives, noting that the VAT bill for certain small businesses is currently under review and will be presented for approval soon.
Recently, Marchenko indicated that a comprehensive tax bill, which includes taxation on income from digital platforms and the removal of the VAT exemption for parcels valued up to 150 euros, will soon be submitted to parliament. The government aims for these reforms to take effect on January 1, 2027.
In January 2025, Danilo Hetmantsev, head of the parliamentary committee on finance, tax, and customs policy, revealed that several bills proposing VAT on all orders from foreign retailers had been submitted to the Verkhovna Rada.
Ukraine's Cabinet has approved tax reforms targeting income from digital platforms and international shipments, aiming to create a fair competitive environment and support post-war recovery. The changes include a reduced tax rate for digital earnings and the extension of military tax, reflecting ongoing funding needs for rebuilding efforts.