Rada rejects revised, 6 alternative bills on scrapping VAT exemption for parcels under EUR 150

The Verkhovna Rada, Ukraine's parliament, refused to endorse bill No. 15112-d and six alternative bills aimed at eliminating the value-added tax (VAT) exemption for parcels under EUR 150. At a plenary session on Tuesday, 210 lawmakers voted in favor of the bill, falling short of the required 226 votes. One lawmaker voted against, while 30 abstained. A motion for a repeat first reading garnered 210 votes, and a request to return the bill for revision secured 220 votes.

Parliament Speaker Ruslan Stefanchuk expressed regret over the vote, acknowledging the failure of legislative efforts to remove tax discrimination against Ukrainian businesses compared to foreign competitors. Danylo Hetmantsev, head of the parliament's finance, tax, and customs policy committee, apologized to Ukrainian businesses, the processing and retail industries, and the public for the unsuccessful legislative attempts.

He claimed that the bill's failure would result in a financial catastrophe, citing the loss of EUR 4 billion in EU aid and the International Monetary Fund (IMF) program.

Finance Ministry calculations indicated that approving the bill could have generated approximately UAH 10 billion annually for the state budget. However, lawmaker Yaroslav Zhelezniak pointed out that the bill would only take effect from 2027, and the government and State Customs Service had yet to develop necessary technical solutions or allocate funds for implementation.

The bill's proposal was to align Ukrainian tax legislation with EU Directives 2006/112/EC and 2006/79/EC on the common VAT system and e-commerce taxation. It mandated VAT taxation for distance sales of goods (excluding excisable goods) worth up to EUR 150 imported from abroad for individuals via electronic interfaces, defining terms like "distance sale of goods," "electronic interface," and "electronic interface enterprise."