Ukraine: New VAT framework for e-commerce signed into law by president

The president on October 22, 2026, signed into law Act 5025-IX, introducing a new value added tax (VAT) and customs framework for cross-border sales of goods to individuals in Ukraine carried out via electronic interfaces (e.g., online marketplaces and platforms) effective as of July 1, 2027.

The fundamental architecture is the same as the original proposal:

• Repeal of the €150 VAT exemption for commercial marketplace goods (20% VAT from the first euro)
• Shift of VAT liability from postal operators to the "electronic interface enterprise" (deemed-supplier model, including nonresidents)
• Retention of the €150 threshold for import duty purposes only
• Preservation of the €45 exemption for genuine noncommercial gifts between individuals

Key changes and clarifications compared to initial proposal

Compared with the initial March 30, 2026, proposal, the package introduces and clarifies the following:

• VAT collected at checkout. Under the main scenario, the buyer pays VAT at the point of purchase, with the amount displayed at checkout, avoiding separate contact with customs on arrival. (The initial proposal framed chargeability by reference to the platform's receipt of payment, without detailing checkout-level collection.)
• €100,000 financial guarantee (new). The marketplace, or its authorized Ukrainian intermediary, would be required to provide a financial guarantee equivalent to €100,000 to protect the budget where VAT is collected but not remitted. This requirement was not present in the initial proposal.
• Registration and Ukrainian representation. Foreign platforms ("electronic interface operators") would register with the Ukrainian customs system, obtain a special registration number, and submit information on goods sold; a nonresident must designate or may operate through a Ukrainian intermediary that registers with customs, submits the required data, and is responsible for the tax obligations.
• Customs clearance procedures now specified. Whereas the related Customs Code changes were undrafted at the time of the initial proposal, the Act sets out the customs clearance procedures for online purchases, the obligations of marketplaces, and the VAT payment mechanics, with information on goods, VAT charged, and financial security transmitted via electronic registers of international consignments.
• Non-registration fallback. If a platform does not register, VAT would instead be assessed and collected from the recipient via postal operators or express carriers, potentially resulting in longer processing times.
• Distance-selling opt-in. Foreign marketplaces may elect to operate under the "distance-selling rules," under which the tax liability arises when the buyer transfers money to the seller and the VAT/customs duty payer is a Ukrainian marketplace or a resident intermediary designated by the foreign platform. The taxpayer must keep separate records of distance-selling transactions, pay tax monthly, and submit reports to customs authorities even where no sales were made.
• First-year transition relief. During 455 days after official publishing of the law (October 22, 2026), no penalties will be imposed for unintentional errors in VAT payment, provided the tax is paid in full.
• Personal-parcel restrictions dropped. Unlike earlier versions, the revised text does not impose restrictions on sending perfume, coffee, or tea in personal parcels.
• Relationship to EU parcel charges. The bill does not adopt the EU's fixed per-category handling charge on low-value parcels; its key operative provision is the 20% VAT rate.

For more information, contact a KPMG tax professional:

Philippe Stephanny | philippestephanny@kpmg.com

Chinedu Nwachukwu | chinedunwachukwu@kpmg.com

Denys Pyshniuk | dpyshniuk@kpmg.ua