The European Business Association (EBA) supports the return of value added tax (VAT) on imported goods (parcels from abroad) worth up to 150 euros. At the same time, they consider it necessary to simplify the customs clearance procedure.

This is stated in the official letter of the association to the Chairman of the Verkhovna Rada of Ukraine Committee on Finance, Tax and Customs Policy Danil Getmantsev. The EBA explained that current regulation leaves many opportunities for disadvantaged entrepreneurs to evade VAT.

In particular, we are talking about dividing an order into several parcels, changing the cost of goods, importing industrial volumes of goods in accompanied and unaccompanied luggage.

According to the Association’s experts, the current preferential tax regime for small quantities of goods distorts competitive conditions in the domestic market, creating more favorable tax and customs conditions for foreign manufacturers and marketplaces.

They also note that because of this tax benefit, according to a study by the Institute of Socio-Economic Transformation, the state budget lost at least UAH 11.8 billion in VAT revenue for 2024. Revenue from customs duties on such goods could account for at least another half of this amount.

“In addition, Ukraine is gradually harmonizing its own tax and customs legislation with the norms of the European Union.

Let us remind you that in the EU, the VAT exemption for parcels of small value (up to 22 euros) was canceled in 2021, and the regulation of customs duties is in the process of being improved, with a tendency towards mandatory declaration of all parcels regardless of their value,” the letter says.

According to the Association’s member companies, this led to a significant increase in VAT revenues in EU countries, and also contributed to the growth of tax revenues from residents who received an advantage in competition with foreign marketplaces.