President Volodymyr Zelenskyy has withheld his signature from a law passed in June to tax digital platforms operating in Ukraine, refusing to enact the measure until lawmakers revise a contentious amendment altering financial oversight rules for politically exposed persons.
Finance Minister Serhiy Marchenko disclosed the delay during a meeting of the Verkhovna Rada committee on finance, tax and customs policy. Marchenko said European partners reacted negatively to parliamentary changes expanding financial control monitoring for politically exposed persons, warning that assistance from the European Union could be blocked if the bill becomes law without modifications.
Under the amendment inserted into the legislation, enhanced financial monitoring by banks is capped at 12 months after a politically exposed person leaves office. After that period, financial institutions may only apply heightened scrutiny if an individual risk assessment produces documented evidence of a high or unacceptably high risk level. Lawmakers also expanded the definition of politically exposed persons to include heads and board members of state-owned banks, adding the clause to the digital platform tax bill to gather enough parliamentary votes for passage.
European Union aid and IMF scrutiny
Marchenko told the committee that Ukrainian officials have already collaborated with European partners to draft an updated version of the financial monitoring legislation. The Verkhovna Rada, Ukraine's parliament, must pass the revised text before the President will sign the digital platform tax law.
The International Monetary Fund criticized the parliamentary amendment in its June memorandum, stating that relaxing financial monitoring rules weakens Ukraine's oversight framework. The IMF warned that the changes remove Ukraine's anti-money laundering and counter-terrorist financing regime from standards set by the Financial Action Task Force, the international oversight body known as FATF.
Politically exposed persons in Ukraine have urged the IMF to review the parliamentary amendment more thoroughly and requested that the international lender refrain from withholding aid over the dispute.
Tax rates for online platforms and sellers
The tax legislation, commonly known in Ukraine as the tax on OLX, is scheduled to take effect on January 1, 2027. Under the law, digital platforms will automatically deduct taxes from the income of individuals offering services through their networks.
The requirement applies to companies providing taxi services, delivery, property rentals, product marketplaces, and other online platforms. Services operating in the country, including Glovo, Uklon, Bolt, and Uber, will withhold tax at a rate of 10 percent, with no military fee applied to those earnings.
Ukraine currently taxes individual income at a rate of 18 percent for personal income tax alongside a 5 percent military fee. Under the new digital rules, sellers trading goods on online platforms can earn up to 2,000 euros per year tax-free, with no limit on the number of transactions.
Annual platform income exceeding 2,000 euros up to the value of 834 minimum monthly wages will be taxed at 10 percent. Any annual revenue above the 834 minimum wage threshold will face a 23 percent tax rate on the excess amount.
Scope for Ukrainian and international businesses
The legislation covers both Ukrainian and foreign companies offering digital services within the national market. Affected services include ride-hailing applications, food and courier delivery networks, short-term housing rental sites, online retail marketplaces, and other commercial digital platforms.
