The EU may link macro-financial assistance for Ukraine to tax changes regarding parcels
The European Union may make part of the payments from its €90 billion financial aid package to Ukraine contingent on changes to the taxation of international parcels, which the International Monetary Fund had previously recommended as well. This involves the possible elimination or revision of tax exemptions for small international shipments. According to media reports, such requirements could become part of the conditions for receiving further macro-financial support from the EU.
Sources familiar with the situation told Bloomberg.
These tax requirements will apply to the so-called macro-financial portion of the €8.4 billion loan, the agency’s sources noted.
On Monday, EU member states agreed to the terms of the macro-financial assistance program for Ukraine, European Commissioner for Economic Affairs Valdis Dombrovskis announced in a post on X.
According to the agency’s sources, to receive these funds, Kyiv must pass legislation that will expand the scope of foreign parcels subject to a 20% value-added tax.
They noted that Ukraine is set to receive the first tranche in June, the second is scheduled for September, and the third by the end of the year, following the completion of reforms.
This requirement aligns with a condition the IMF set for disbursing the next $700 million tranche of its assistance program, the sources noted. The condition involves eliminating the tax exemption for international parcels valued at up to 150 euros. The European Commission is coordinating certain conditions for providing financial assistance to Ukraine with those of the lender in Washington.
“The program will strengthen Ukraine’s economic and financial stability while supporting reforms and the fight against corruption,” Dombrovskis noted in a post.
The proposed model for taxing parcels is extremely unpopular among Ukrainians, raising serious doubts as to whether parliament will approve it. MP Yaroslav Zheleznyak told Bloomberg that he does not see sufficient support for the measure’s adoption, which requires at least 226 of 392 possible votes.
His view aligns with the concerns expressed by one of the agency’s sources, who wished to remain anonymous.
Dmytro Gerasymenya, a spokesperson for Ukraine’s Ministry of Finance, told Bloomberg that the government continues to work on finalizing the EU loan agreement and its terms ahead of parliamentary ratification.
Discussions are still ongoing within the European Union on whether to extend protection for Ukrainian citizens.
The EU may change the terms of temporaryprotection for Ukrainians, according to the European Commission.
As a reminder, Slovakia has automatically extended the term of temporary protection for Ukrainians who fled Ukraine due to the full-scale war unleashed by Russia until March 4, 2027.
In addition, Ukrainians who have received temporary protection in Ireland can breathe a sigh of relief, as the country’s authorities have automatically extended their immigration permits until March 4, 2027.
Although the EU has extended temporary protection for Ukrainian refugees until 2027 and guaranteed them access to housing, the labor market, education, and healthcare, the situation is already changing in many ways.
Ukrainian refugees will lose their temporary protection in the EU: are they ready to return?
