Why the tax break for Chinese marketplaces is a threat to Ukrainian production

Rapid development of international online trade

Every year, Ukrainians are increasingly buying goods on international marketplaces. In 2023, customs cleared 51.9 million international mail items, in 2024 – 72.0 million, and in the first half of 2025 – 37.7 million items. The value of such shipments, including those that were exempt from value added tax, has almost quadrupled in three years. While in 2022, tax-free imports through postal items amounted to UAH 22.9 billion, by the end of 2025, the expected volume of such imports will be at least UAH 89.2 billion.

At the same time, 99% of postal items are not subject to taxation due to the existing exemption of 150 euros.

The impact of the 150 euros exemption on the economy

The tax exemption for parcels worth up to EUR 150 has become a tool for VAT evasion and importation of a significant volume of goods into the country. According to the Ministry of Finance, in 2024, 71.4 million parcels with a total value of over UAH 59.5 billion entered Ukraine, 82% of which were goods from Chinese marketplaces.

As a result, imported goods enter the domestic market without being subject to value added tax, while domestic goods are sold at a price that includes this tax. At the same time, one individual can legally import goods worth EUR 4.5 thousand without taxation every month, and a group of 10 people can import tens of millions of hryvnias over the course of a year. This possibility creates uncompetitive conditions for Ukrainian producers, who, unfortunately, do not have such a privilege .

According to available research, Ukrainians mostly receive clothing, footwear, electronics and accessories, cosmetics, household goods, stationery, toys, materials for needlework and drawing, and construction sets via international parcels.

Among the largest parcel senders are Chinese marketplaces Temu (UAH 13.5 billion in the first half of 2025), AliExpress (UAH 4.4 billion in the first half of 2025), and the Chinese logistics company Cainiao (UAH 4.1 billion in the first half of 2025).

Average monthly shipments from the Temu marketplace in Ukraine increased eightfold (2024 compared to 2023). Such growth rates of tax-free imports undermine domestic markets for the production of own goods.

The vast majority of these goods are already produced in Ukraine – there are 20 thousand manufacturers of clothing and footwear, 200 manufacturers of toys and accessories, and hundreds of manufacturers of household goods in Ukraine.

As a result, the country is losing its potential for domestic production, supporting foreign producers.

By the end of 2025, expected shortfall in VAT revenues to the state budget is UAH 17.9 billion, in 2026 – UAH 27 billion.

European experience: how Import One Stop Shop works

Until 2021, the EU had a rule that parcels worth up to 22 euros were not taxed. However, this led to large-scale abuses: Chinese sellers systematically underestimated the value of goods, split batches, and effectively avoided taxation of their goods. That is why the European Commission completely abolished the duty-free import threshold and created the Import One Stop Shop (IOSS) system .

Its essence is simple: a foreign seller or marketplace registers in one EU country, collects VAT at the time of purchase, and transfers it to the budget of the country from which the goods were purchased. This eliminates bureaucracy and manual administration. The buyer sees the final price immediately on the marketplace's website, and the state receives tax revenues.

The decision to tax all imports was also made this year in the United States: the de minimis rule of $800 was abolished there due to the growth of tax-free imports from China. This approach allowed to protect local production and strengthen control over the quality of goods.

What should be implemented in Ukraine

To implement the international parcel taxation model, the state needs to take several preparatory steps: launch an electronic seller registration platform – an analogue of IOSS; conduct a pilot with the largest marketplaces (AliExpress, Temu, Amazon, eBay) to test the processes; establish data exchange between tax, customs and postal services.

The Customs Service should have digital tools for automatic processing of data from international marketplaces, reporting and payments.

After that, it is advisable to launch the taxation model (IOSS) for the entire market.

The government should also explain to its citizens that this is not "new taxation" but leveling the playing field: all goods, whether imported or domestic, should be on a level playing field.

Expected effect of the abolition of the parcel tax exemption:

- for business – leveling the playing field;

- for the budget – plus UAH 27 billion in 2026;

- for the state as a whole – economic development and integration into the EU.

Why this decision is long overdue

The abolition of the tax exemption for international parcels is not about additional costs for an average Ukrainian, it is about equal trade conditions for all market participants, it is about protecting the domestic market from imported goods, it is about additional budget revenues without increasing fiscal pressure on business, it is about European taxation rules.

We hope that the Cabinet of Ministers and the Parliament will implement the necessary changes to the legislation in the near future, providing conditions for the development of Ukrainian producers.