Analysis of the draft law:
Here is a professional legal analysis of the proposed amendments to the Tax Code of Ukraine and the Law “On Prevention and Counteraction to Legalization (Laundering) of Proceeds…” prepared for your review.
### 1. Essence of the draft law
This draft law introduces a new mechanism for value added tax (VAT) taxation of remote sales of goods imported into Ukraine via international postal and express shipments. The main goal is to make VAT administration for such goods more efficient by assigning responsibility to “electronic interface enterprises” (marketplaces). The project also introduces clarifications to financial monitoring procedures regarding politically exposed persons (PEPs).
### 2. Structure and main provisions
The document introduces systemic changes to the Tax Code (TC) and the specialized law on financial monitoring.
* **Expansion of terminology:** New concepts have been added to Article 14 of the TC: “remote sale of goods,” “electronic interface enterprise,” “electronic interface,” and “intermediary.”
* **Change of responsibility:** Article 180 of the TC is supplemented with clause 180.2-3, which defines the electronic interface enterprise (or its intermediary) as responsible for the accrual and payment of VAT.
* **New Article 191-1:** A special taxation procedure is being introduced, which details reporting, exchange rates for calculations, and conditions for applying VAT to goods under 150 euros.
* **Abolition of exemptions:** Provisions of Article 196 of the TC, which previously excluded such operations from the object of taxation, are excluded.
* **Financial monitoring:** Technical and substantive amendments are made to Article 11 of the Law on Financial Monitoring, in particular regarding risk assessment procedures for individuals who have ceased performing public functions.
### 3. Key provisions for business, experts, and legislators
* **For business (marketplaces and operators):** The most important change is the transfer of the VAT payment obligation from the recipient (individual) to the platform. This requires international electronic platforms to register in the Ukrainian tax system and submit regular reports.
* **For the tax system:** The introduction of the new Article 191-1 effectively creates a separate tax regime where the tax base is the invoice value. The approach to determining the place of supply of goods is changing (it is tied to the moment the goods are received by the buyer in Ukraine).
* **Currency issues:** Article 397 of the TC clearly differentiates the mechanism for applying the official NBU exchange rate depending on who is the responsible taxpayer—a resident or a non-resident—which minimizes currency risks during reporting.
* **For legislators:** The project is aimed at integrating Ukrainian tax legislation with European approaches to remote commerce, which is reflected in the introduction of the concept of “electronic interface enterprise.”
* **Financial monitoring (PEPs):** Amendments to Law No. 361-IX clarify that after the 12-month period expires following the cessation of performing functions, the bank does not have the right to automatically deny service, but must conduct an individual risk assessment. This is a significant change that protects the rights of PEP clients from unjustified refusals.
This is a fundamental change that moves international postal trade into the realm of full-fledged tax administration, similar to the experience of EU countries.
Analysis of the explanatory note:
Greetings. As a lawyer with many years of experience, I have analyzed the provided document. Here is a concise and professional breakdown of this draft law for your material.
### 1. Essence of the draft law
This draft law is aimed at reforming VAT taxation rules for goods purchased through foreign online platforms and delivered to Ukraine by mail or express carriers. In fact, the state is introducing a mechanism under which **electronic platforms (marketplaces) become responsible for the accrual and payment of VAT** when selling goods to Ukrainian consumers, which brings us closer to the EU tax model.
### 2. Why has this arisen now?
In the opinion of the document’s author (Ministry of Finance), three factors have become the main drivers:
* **European integration:** Ukraine must fulfill obligations under Memoranda with the EU and the IMF, in particular, to harmonize our legislation with EU Council Directives (specifically 2006/112/EC).
* **Combating unfair competition:** Currently, foreign platforms have a tax advantage over Ukrainian businesses that pay all taxes within the country. Eliminating “exemptions” for the import of low-value goods should correct this imbalance.
* **Elimination of schemes:** Current rules allow for tax avoidance, leading to budget losses that the government estimates at 10 billion hryvnias per year.
### 3. Key consequences for business and citizens
For understanding, it is important to highlight the following:
* **For the budget and the state:** A significant increase in tax revenues (about 10 billion UAH annually) is expected, as is the fulfillment of “homework” before international creditors.
* **For consumers:** A clear distinction is introduced: goods worth up to 45 euros, sent between individuals for non-commercial purposes, remain exempt from VAT. However, commercial orders through “electronic interfaces” (AliExpress, Amazon, eBay, etc.) may now be subject to VAT even for amounts under 150 euros, which will highly likely lead to higher prices for the end consumer.
* **For business:** Foreign platforms will be forced to register in Ukraine or operate under the new rules, which creates more equal competitive conditions for domestic sellers.
* **Important nuance:** The draft law provides exemptions for defense-related goods and energy equipment, which is strategically important in the context of the war. Amendments to the financial monitoring legislation are also being made, which should somewhat simplify the lives of politically exposed persons (PEPs) as bank clients.
*Summary:* This is a classic example of forced digitalization and Europeanization of tax administration. For the average citizen, this means the end of the era of “tax-free” small purchases from abroad, and for the state, a systemic tool for filling the budget.
Analysis of other documents:
### Analysis of the Draft Law on VAT on Remote Sales of Goods
As a lawyer with many years of experience, I have analyzed the provided documents. Below is a concise analysis for your work.
#### 1. The author’s position on the draft law
The author of the draft law is the Cabinet of Ministers of Ukraine, which clearly indicates full support for this initiative by the government. The government views this document as a necessary tool for streamlining the taxation of international postal and express shipments, as well as for leveling the competitive conditions in the remote trade market.
#### 2. Main provisions of the draft law
For businesses, experts, and the general public, the following aspects are most important:
* **Introduction of the “remote sale” concept:** The draft law introduces the term “electronic interface enterprise” (marketplaces). They are the ones entrusted with the responsibility for the accrual and payment of VAT, which significantly changes the administration mechanism compared to current practice.
* **Change of the responsible person:** The tax agent for the sale of goods through digital platforms becomes the platform itself (or its intermediary in Ukraine, if the marketplace is a non-resident). This simplifies control for customs authorities but imposes new administrative obligations on interface operators.
* **Simplified tax accounting:** The draft law provides that those responsible for remote sales **do not** draw up tax invoices and declarations, but submit only a special “report on the accrual and payment of customs duties.” This is a significant simplification of reporting for taxpayers.
* **VAT exemption for defense goods:** An important social and security aspect is the creation of a legal mechanism for VAT exemption for goods intended for security and defense purposes, with the possibility of refunding the paid tax to the buyer.
* **Transitional provisions and exchange rates:** The draft law details the rules for applying exchange rates for calculating VAT, which is critically important to avoid arbitrage and errors during declaration.
* **Changes in financial monitoring:** A separate block covers changes to anti-corruption legislation (regarding politically exposed persons — PEPs). This creates a more flexible approach to serving such clients by financial institutions, limiting baseless refusals to conduct transactions.
In general, the project is aimed at integrating Ukrainian customs and tax legislation into the European VAT administration model for remote trade, which will make the procedure more transparent for the state and more disciplined for international platforms.
