New rules for international postal and express shipments: Draft Laws No. 12429 and No. 12430 dated 20 January 2025

Draft Law on Amendments to the Customs Code of Ukraine No. 12430 dated 20 January 2025 and Draft Law on Amendments to the Tax Code of Ukraine No. 12429 dated 20 January 2025

The following draft laws have been registered in the Verkhovna Rada of Ukraine:

• on Amendments to the Customs Code of Ukraine to align the procedure for payment of customs duties with the requirements of Council Directive 2006/112/EC of the European Union of 28 November 2006 on the common system of value added tax and the Law of Ukraine "On Postal Service" regarding certain issues of international postal exchange (“Draft Law No. 12430”);

• on Amendments to the Tax Code of Ukraine to align the procedure for taxation of importation (shipment) of goods into the customs territory of Ukraine through international postal and express shipments with the requirements of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax 2025 ("Draft Law №12429").

These Draft Laws are intended to change the approach to VAT taxation and customs clearance for low-value international postal and express shipments. The legislator proposes the following changes:

• Introduction of the concept of "distant sales of goods".

• Obligation of registration as VAT payers in Ukraine for non-residents engaged in the distant sales of goods.

• Imposing VAT on goods sent via international postal and express shipments addressed to legal entities, regardless of their value.

• For shipments addressed to individuals, taxation will be as follows:

• Mandatory declaration of postal and express shipments at customs is introduced. Thus, goods valued up to 150 euros can be declared under a simplified procedure, while goods valued over 150 euros require a written declaration. It is imposed that declarations may be submitted by postal operators, express carriers, or recipients/senders.

• Postal operators and express carriers are required to maintain registers of international shipments, replacing customs declarations.

• A simplified customs clearance procedure is established for goods exported via postal shipments valued up to 1,000 euros.

• A special procedure for VAT taxation on transactions involving distant sales of goods is introduced. The special procedure is potentially optional and involves the engagement of an intermediary as an authorized person for distant sales of goods, acting in the interests of a non-resident. The requirements and responsibilities for such an intermediary are established. However, the taxation of VAT for distant sales of goods without applying the special procedure remains unclear.

• New requirements are established for international postal operators, such as: an official website with access to tariffs, a mobile application with shipment tracking functionality, reception points or branches in all regions of Ukraine (except occupied areas), and at least one year of experience in international trade.

These changes will come into force one year after their publication, if the Draft Law is adopted. Currently, there are also several registered alternative draft laws.

We will continue to monitor the development of this issue.