Here’s what online merchants can expect from these new state measures.
New Monitoring Tool Targets Unregistered Sales
Since March 1, the State Tax Service has been receiving data from the RRO Data Accounting System. This system identifies two key groups:
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Citizens Selling Without Registration: Individuals who systematically receive funds for goods sold online, effectively operating as businesses without proper state registration.
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Entrepreneurs with Non-Compliant Operations: Registered individuals-entrepreneurs who fail to use registered RROs/PRROs, thereby breaching the settlement and tax compliance requirements.
In just the first 20 days of March, tens of thousands of such cases were flagged. Some sellers have even recorded hundreds of transactions without adhering to state registration norms.
Impact on Fair Competition
Legal businesses that operate by following regulatory guidelines are now facing stiff competition from unregistered online sellers. The European Business Association emphasizes the need for a level playing field, arguing that:
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Unfair Market Dynamics: Legitimate companies incur higher costs due to compliance, while shadow sellers enjoy an unfair advantage.
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Call for Regulatory Action: Business representatives are pushing for public discussions on draft laws, creation of monitoring working groups, and the establishment of registers to track licensed sellers of excisable goods (such as alcohol, tobacco, and e-cigarette liquids).
These measures are critical for ensuring fair competition and protecting the interests of consumers and legal businesses alike.
Strengthening Market Surveillance
In parallel with tax control efforts, the Verkhovna Rada has taken steps to enhance market surveillance. A recently supported bill proposes:
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Expanded Online Monitoring: Extending market checks to include products sold via the Internet and other distance trading methods, ensuring that both physical and online stores adhere to the same standards.
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Inclusive Regulatory Framework: Including order fulfillment and information service providers (like online marketplaces) under the purview of state market surveillance, which will enable quicker responses to consumer complaints.
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Coordinated Inspections: Outlining clear procedures for how customs and quality control bodies collaborate to accelerate inspections and ensure product safety.
This move aims to foster fair competition and ensure that products sold online meet stringent safety and quality standards.
New Parcel Taxation Proposals
In addition to increased oversight of online sales, the Verkhovna Rada is considering several bills on parcel taxation. Key proposals include:
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Eliminating the 150-Euro Exemption: Removing the current tax-free limit for parcels, which could lead to international parcels being taxed at 20% VAT.
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Exception for Low-Value Shipments: Retaining a tax exemption for shipments up to 45 euros between private individuals.
This comes in response to the surge in parcel imports, with 75 million parcels arriving in Ukraine in 2024, yet contributing only over 185 million UAH in customs duties.
What This Means for Online Merchants
For online merchants in Ukraine, these new measures signal a shift towards greater regulatory oversight. Key takeaways include:
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Compliance Is Crucial: Whether you are a registered entrepreneur or a private seller, ensuring proper registration and adherence to tax laws is essential to avoid financial and administrative penalties.
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Transparency in Transactions: The increased monitoring will likely encourage a more transparent and fair online marketplace, benefiting both consumers and compliant businesses.
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Enhanced Market Conditions: With stricter surveillance and potential changes in parcel taxation, the overall business environment is expected to become more structured and equitable.
Conclusion
The State Tax Service’s enhanced control over online sales, combined with stricter market surveillance and proposed parcel taxation reforms, marks a significant step towards modernizing Ukraine’s digital commerce landscape. Online merchants should take this opportunity to review their business practices and ensure full compliance with state regulations. In doing so, they can avoid penalties and contribute to a healthier, more competitive market.
Stay updated with our expert analyses and insights on regulatory changes affecting Ukraine’s online business environment.
