The Verkhovna Rada supported at first reading bill No. 16051-1 on amendments to the Tax Code concerning the abolition of the value-added tax (VAT) exemption for international postal shipments worth up to EUR 150.
As reported by an Interfax-Ukraine correspondent, during Wednesday's plenary session, 273 members of parliament voted in favor of adopting bill No. 16051-1, against the required minimum of 226 votes, while one voted against.
"I am speaking from the Rada rostrum for the third time asking you to support an important bill that is part of our international commitments and provides for fair taxation conditions... We can no longer delay this. We have already taken certain steps to defer expenditures until December. A decision is now being prepared that will allow us to operate under conditions of a liquidity crisis. But this has a significant impact on the ability of central executive authorities and local budgets to exercise their powers under conditions of full-scale aggression," Finance Minister Serhiy Marchenko said from the parliamentary rostrum.
He added that due to the postponement of the abolition of the VAT exemption for international postal shipments worth up to EUR 150, EUR 4 billion will already fail to be received in September. According to Marchenko, the government urgently resubmitted two bills on abolishing the exemption (No. 16051 on amendments to the Tax Code and No. 15460 on amendments to the Customs Code), as there is a chance to receive these funds in October if the vote is successful.
As noted in the explanatory note to the bill, the amendments were developed to harmonize national tax legislation with European Union law, in particular to implement the provisions of Council Directive (EU) 2017/2455 and Directive 2006/112/EC on abolishing the VAT exemption for imports of low-value goods. This will eliminate distortions of competition between suppliers inside and outside the EU.
The document provides for the introduction of special VAT rules for transactions involving the distance sale of goods (excluding excise goods) imported in international postal and express shipments addressed to individuals and valued at up to EUR 150, with enterprises providing electronic interfaces or their intermediaries designated as responsible for assessing and paying the tax. At the same time, the VAT exemption is retained for small noncommercial consignments worth up to EUR 45 sent from individuals to individuals free of charge, as well as for goods in unaccompanied baggage worth up to EUR 150 and goods for security and defense purposes (energy equipment and goods for the defense forces).
Implementation of the law's provisions is expected to bring an additional approximately UAH 10 billion per year into the state budget.
As reported, the Verkhovna Rada Committee on Finance, Tax and Customs Policy recommended that parliament adopt bills No. 15460 and No. 16051-1 on amendments to the Tax and Customs Codes concerning value-added tax (VAT) treatment of e-commerce transactions.
Earlier, on September 1, the Rada rejected the revised bill (No. 15112-d) and six alternative bills on abolishing the VAT exemption for parcels worth up to EUR 150.
The parliament also sent back for revision bill No. 15460 on amendments to the Customs Code aimed at abolishing the VAT exemption for international parcels worth up to EUR 150. In May, the Rada rejected a bill containing similar amendments to the Customs Code (No. 12360).
Consideration of bill No. 15460 for the second time is expected on Wednesday, September 16.
The Verkhovna Rada's adoption of bills abolishing the tax exemption for international parcels worth EUR 150 is a condition for Ukraine to receive the third tranche under its program with the International Monetary Fund, worth approximately $0.7 billion, and the second tranche of macro-financial assistance from the European Union, worth EUR 13.7 billion, under the EUR 90 billion Ukraine Support Loan.
In the updated Memorandum of Economic and Financial Policies under the EFF program with the IMF, Ukraine undertook, as a new structural benchmark, to adopt this law by the end of July, whereas under the original version it was to be approved by the end of March along with other tax provisions. However, this structural benchmark was not met.
