Tax Changes in Ukraine from 2027: Military Levy, Parcels, and New Rules for Business
Ukraine is preparing a package of tax changes that could come into force starting in 2027. Some of them concern areas that have long been at the center of discussion: the military levy after the end of martial law, taxation of international parcels, income from online platforms, and the possible introduction of VAT for sole proprietors under the simplified tax system. Formally, these changes are presented as steps toward de-shadowing the economy, leveling the playing field for businesses, and securing resources for the state in the post-war period. But a closer look shows something broader: the state is not just adjusting отдельных rules, but rebuilding the very logic of the tax system in areas where semi-formal practices and loopholes have existed for years. Time for Action has analyzed which changes are being discussed, why some are being pushed forward now while others are postponed, and what this means for entrepreneurs, digital platforms, and citizens.
The first important signal is that the state no longer treats the military levy as a purely wartime instrument. It is proposed to extend it for three more years after the end of martial law. This alone reflects the government’s broader mindset: the financial model after the war will not be easy, and a quick return to pre-war tax logic is not expected. The explanation is straightforward. Spending on defense, security, and reconstruction will not disappear the moment martial law ends. On the contrary, the state is effectively acknowledging that financial pressure will remain high. As a result, a tax introduced as an emergency measure is gradually turning into a longer-term tool for budget financing.
At the same time, there are no proposals to change the rates. For employees and individuals, it remains 5% of income; for certain categories of sole proprietors, fixed or income-based payments depending on their group. In practical terms, this means that the temporary nature of this levy is becoming more formal than real. This is both an economic and political signal. The state is showing that reconstruction will be financed not only through international aid or large businesses, but also by maintaining fiscal pressure within the country. Even though the military levy does not cover all needs, it already generates noticeable revenue, and the government is not ready to give up this instrument.
The second direction concerns international parcels and here the government is moving toward a stricter model. The proposal is to reduce the threshold for VAT-free shipments. Currently set at €150, it would be lowered to €45, and only for non-commercial items such as gifts or personal belongings. In other words, the state aims to limit schemes where commercial goods are imported under the guise of private parcels. This clearly illustrates one of the key lines of future tax policy: the government intends to close not only direct tax evasion, but also legal or semi-legal mechanisms that businesses have used for years to reduce their tax burden. The state’s argument rests on two points. First, the budget is losing significant revenue. Second, Ukrainian businesses face unfair competition from those who exploit international delivery channels as a loophole. Therefore, changes in parcel taxation are framed not only as a fiscal measure, but also as a way to level competition. For consumers, this means one simple thing: some goods from abroad will no longer be as financially attractive as before. For businesses, it signals that schemes involving fragmentation or disguising imports as personal shipments are coming under direct pressure.
The third issue income from digital platforms is where tensions between the state and the market are currently the highest. This concerns earnings from marketplaces, delivery services, ride-hailing, and other platforms where individuals generate regular income without always having a clearly defined tax status. The state proposes a 5% tax rate for such income, provided it is not occasional sales of personal belongings. Small-scale, one-off sales within a defined annual threshold would remain untaxed. At first glance, this appears to be a compromise. Casual selling is left untouched, while systematic income is taxed at a lower rate than the standard personal income tax. However, the main controversy is not about the 5% rate.
The real issue is that platforms are expected to become tax agents. This means they would be responsible for calculating, withholding, and transferring taxes on behalf of their users. And this is precisely what is raising concerns among businesses. It is no longer about simply sharing data with the state, but about transferring actual tax responsibilities to platforms. For companies, this is far more significant than it may seem. It requires changes to internal systems, restructuring transaction logic, adapting reporting processes, and building new technical and legal frameworks. For some, this will be an additional burden. For others, it could become a full-scale transformation project. There is also a key criticism from the market the proposed model does not align with European practice, which Ukraine often refers to. In the EU, digital platforms report income data under the relevant directive but do not act as tax-paying agents on behalf of users. The Ukrainian approach therefore appears more stringent. That is why parts of the business community support the idea of regulating platform-based income, but oppose the method being proposed. This distinction is important. The disagreement is not about bringing platform income into the formal economy, but about the scale of responsibility the state wants to shift onto private companies.
Timing is another critical issue. Even if platform registration begins in November 2026 and reporting starts in 2027, businesses are already signaling that the timeline is too tight. The reason is clear: the legislation still needs to pass all stages of approval, and after that companies will need not just to understand the rules, but to rebuild their operational systems. The risk here lies not only in the substance of the reform, but in the speed of its implementation.
The fourth issue VAT for sole proprietors remains the most politically sensitive. This idea has been discussed repeatedly, with different thresholds proposed over time. At one stage, it was suggested that sole proprietors under the simplified system would have to pay VAT if their annual turnover exceeded 4 million hryvnias. However, this provision has not yet been turned into a separate bill. The fact that it has not been included alongside other reforms is telling. It suggests that the government understands the sensitivity of the issue and is not ready to open another front of conflict with small businesses at this stage. At the same time, the idea has not disappeared. It remains part of the broader strategy of the Ministry of Finance: to close loopholes that allow larger businesses to use simplified schemes or fragment operations to minimize taxes. Therefore, discussions about VAT for sole proprietors should not be seen as concluded they are merely postponed. It is important to understand the broader perspective the state is beginning to view the simplified tax system not only as a tool to support small business, but also as a space where both genuine small enterprises and large-scale tax optimization schemes coexist. Any attempt to separate these two inevitably creates political tension, as it affects a wide group of entrepreneurs.
Taken together, these initiatives reveal how the state envisions the post-war tax system. It is a system with fewer exceptions, greater reliance on digital control, broader tax coverage, and more stable fiscal pressure. In other words, the government is moving toward a model where the tax base is expanded and opportunities to operate in gray or semi-gray zones are reduced. From the state’s perspective, this logic is clear. After the war, the country will need funding for defense, social spending, reconstruction, and overall financial stability. In this context, the government is seeking resources not only through new rates, but by closing existing gaps. From the business perspective, however, the picture is more complex. Entrepreneurs and platforms see another risk: rules may become stricter faster than the state can ensure clarity, technical readiness, and predictability of implementation. This creates the danger not of de-shadowing, but of new uncertainty when businesses want to operate legally but lack clear and workable conditions to do so.
This is why the current debate is not only about taxes. It is about the model of the post-war economy. Will it be a system that truly levels competition and eliminates large-scale avoidance schemes without undermining small businesses? Or will it become a model where fiscal priorities outpace the market’s ability to adapt? For now, there is no final answer. But one thing is already clear: the tax changes planned for 2027 are intended as the beginning of a new phase more rigid, more formalized, and far less tolerant of existing optimization mechanisms. For the state, this is a way to secure funding and impose order. For businesses, it is a signal that the period of relative tax flexibility is coming to an end. And it is at the intersection of these two perspectives that the future economic model of Ukraine will be shaped.
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