Temu and AliExpress may automatically charge a 20% VAT to buyers in Ukraine
This is set out in draft laws No. 15112-d and No. 12360.
International marketplaces Temu and AliExpress may start automatically charging 20% VAT to buyers in Ukraine when they place an order.
This mechanism is provided for in the updated draft laws No. 15112-d and No. 12360 on the taxation of imported parcels worth up to €150.
The documents set out new VAT administration rules for goods purchased by Ukrainians on foreign online platforms.
Two options for paying VAT
The first option involves paying the tax directly at the time of purchase on the marketplace.
In this case, the platform will automatically charge VAT when the order is placed.
The marketplace will then transfer the funds to delivery operators, who will pay them into the budget.
The article notes that large international platforms that have already invested in the Ukrainian market are unlikely to withdraw from Ukraine.
They can technically adapt their IT systems to automatically charge VAT.
Who delivers Temu parcels
Currently, several operators deliver Temu goods to Ukraine.
These include Ukrposhta, Nova Poshta and Meest Express.
It is the delivery operators who could become part of the tax administration mechanism once an order has been placed on the marketplace.
What will happen to small sellers
The second option involves the recipient paying VAT directly via the postal operator.
This mechanism could be applied to small sellers who will not invest in technical integration with the Ukrainian tax system.
In this case, sellers must provide operators with information on the movement of parcels.
Postal operators will be able to contact the buyer before the parcel arrives in Ukraine and arrange for the tax to be paid.
The funds must then be transferred to the state budget.
How parcel tracking will work
Ukrposhta explained that they plan to use the UCR – a unique parcel code – for VAT administration.
This should help with consolidated shipments.
This refers to situations where marketplaces combine several orders into a single parcel to save on logistics.
According to Ukrposhta, in 2021 the company transported around 4 million kg of international shipments.
Last year, this figure rose to 12 million kg, although the number of parcels themselves did not increase significantly.
The position of customs and business
The State Customs Service has stated that customs is ready to process all parcels automatically from the new year if the draft law is passed.
Business representatives are calling for the bill to be passed as soon as possible.
They believe that the current system creates an uneven playing field for Ukrainian manufacturers.
Businesses also point out that the current rules may encourage companies to move their e-commerce warehouses abroad, particularly due to the risks of air strikes in Ukraine.
What the Verkhovna Rada committee has already recommended
The relevant Verkhovna Rada committee has recommended that parliament adopt the package of draft laws No. 15112-d and No. 12360.
The documents provide that, as part of the harmonisation of Ukrainian legislation with EU standards, Ukraine may place the responsibility for VAT administration on foreign marketplaces.
The draft laws also provide for the automatic exchange of information on the sale of goods via online platforms.
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