Taxation of import goods of value below EUR 100 (‘100 euro goods’) is a white spot of Ukrainian legislation. No wonder customs authorities lost when tried to clarify this issue. Currently situation is still favorable for importers, especially for express carriers importing a great number of parcels but will it last for ever?
Under customs legislation import 100 euro goods are treated in special way. According to Government Resolution No. 1948 dated December 12, 2002 goods sent to legal persons via postal and express carriers services shall be taxed in case of application of cargo customs declaration. During customs clearance of 100 euro foods importer files special Letter instead of Cargo customs declaration. Consequently, clearence of 100 euro parcels sent to legal persons doesn't require cargo customs declaration and they are not subject to import taxes.
On April 7, 2009 State Customs Service of Ukraine issued the letter in contempt of Government Resolution. According to the letter all 100 euro goods, including parcels for legal persons, shall be taxable. Customs authorities shall issue unified customs receipt recording the sum of import taxes.
The letter greatly contradicted to the general line of customs authorities’ practice. 100 euro parcels were not taxable in many regions including Kyiv. Thus, regional Customs offices were unready to tax increased number of goods and to issue unified receipts in such quantity. Therefore, in few days the reserve of unified customs receipts forms exhausted. In order to solve this problem State Customs Service issued the letter which allowed issuance of M 15, M 16 customs declarations instead of unified receipts. This letter also violated legal provisions as M 15 and M 15 customs declarations are applicable only to parcels sent to natural persons, not legal ones.
On April 10, 2009 State Customs Service of Ukraine cancelled its previous letters without any explanation. Nevertheless, we may assume that obligatory taxation of 100 euro goods, including parcels for legal person requires amendments of current laws. Will it happen?
On one hand Standard 4.13 of Revised Kyoto Convention requires national legislation to “specify a minimum value and/or a minimum amount of duties and taxes below which no duties and taxes will be collected.” Consequently, Ukraine as a party to the Revised Kyoto Convention shall implement this transitional standards till October 2011. On the other hand Government is looking for new sources to fill budget and may initiate legal amendments aimed at temporary taxation of 100 euro goods. However, expenditures on additional administrating of such goods are likely to exceed tax revenues. It increases the probability of such government’s actions.