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European Commission report: Ukraine demonstrates progress in taxation and aligns legislation with EU standards

Ukraine Government

State Tax Service of Ukraine, posted 04 November 2025 17:44

Ukraine has achieved good progress in the field of taxation. This is stated in the Report within the framework of the 2025 EU Enlargement Package, released today by the European Commission. This is one of the key documents defining the direction of Ukraine's transformational processes on the path to EU membership.

This year, the country received the highest assessments in the last three years within the Enlargement Package. The Report confirms steady progress in implementing EU norms and standards.

In particular, the harmonisation of approaches to the excise taxation of tobacco products has been ensured. Amendments to the Tax Code of Ukraine provide for a gradual annual increase in excise tax rates on tobacco products. This will enable the achievement, by 2028, of the rates set by EU legislation.

Furthermore, Ukraine has ensured the implementation of the EU Directive on administrative cooperation in the field of taxation. To this end, a draft Law "On Amendments to the Tax Code of Ukraine and Certain Other Legislative Acts of Ukraine on the Introduction of International Automatic Exchange of Information on Income Received through Digital Platforms" has been developed and submitted to the Verkhovna Rada.

The Report also highlighted the enhanced operational capacity and digitalisation of the activities of the State Tax Service of Ukraine, which will contribute to greater efficiency in tax administration and transparency of the tax system.

Among the results is the approval of the Action Plan for the Implementation of the Competency-Based Human Resources Strategic Management Model at the STS for 2025-2030. The document provides for the introduction of modern approaches to personnel policy, the formation of a list of tax competencies, and the gradual implementation of a competency-based human resources management system in the processes of selection, performance evaluation, and professional development of employees, with a review of existing training programmes.

At the same time, the functionality of the STS information and communication systems has been improved through connection to the VAT Information Exchange System (VIES). This enables verification of the validity of VAT payer identification numbers registered in European Union countries. This is an important step towards Ukraine's integration into the EU's single digital space.

In addition, the European Commission noted the approval of the Digital Development Plan of the State Tax Service of Ukraine until 2030. The next stage is the development of a roadmap for implementing the IT solutions necessary to meet the requirements associated with Ukraine's accession to the European Union.

No less important is the strengthening of anti-corruption measures. In October 2025, as part of the development of a new anti-corruption programme for the STS for 2026-2028, an assessment of corruption risks was carried out, measures to address them were identified, and a two-year pilot project was launched to create a single authorised unit for the prevention and detection of corruption. Within this project, a single department for the prevention and detection of corruption has been established within the STS structure, which will increase the effectiveness of responses to corruption risks.

Such steps are crucial for the further integration of Ukraine into the European economic space and the creation of a stable tax policy compatible with EU norms.