European Commission report: Ukraine demonstrates progress in taxation and brings legislation closer to the EU standards

Press service of the State Tax Service of Ukraine, published 04 November 2025 at 17:30 Chapter: News

Ukraine has made a good progress in ​​taxation sphere. This is stated in the Report within framework of the European Union Enlargement Package 2025, published today by the European Commission. This is one of the key documents determining direction of Ukraine’s transformation processes on the path to membership in the European Union.

This year, the country received its highest score in the last three years under the Enlargement Package. Report confirms steady progress in implementing the EU norms and standards. 

In particular, harmonization of approaches to taxation of tobacco products with excise tax has been ensured. Adopted amendments to the Tax Code of Ukraine provide for a gradual annual increase in the excise tax rates on tobacco products. This will allow reaching level of rates set by the EU legislation by 2028.

In addition, Ukraine has ensured implementation of the EU Directive on Administrative Cooperation in taxation sphere. To this, a draft Law “On amendments to the Tax Code of Ukraine and certain other legislative acts of Ukraine regarding implementation of the international automatic exchange of information on income received through digital platforms” was developed and submitted to the Verkhovna Rada. 

Report also noted increase in the operational capacity and digitalization of activities of the State Tax Service of Ukraine, which will contribute to increasing efficiency of tax administration and transparency of the tax system.

Among the results is also approval of the Action Plan for implementation of the Strategic human resources management model based on competencies of the State Tax Service for 2025 – 2030. Document provides for introduction of modern approaches to the personnel policy, formation of a list of tax competencies, as well as gradual introduction of a competency-based human resources management system into the selection processes, performance assessment and professional development of employees with a review of existing training programs.

At the same time, functionality of the information and communication systems of the State Tax Service has been improved by connecting to the VAT Information Exchange System (VIES). This allows checking validity of the VAT identification numbers of taxpayers registered in countries of the European Union. This is important step towards Ukraine’s integration into the single EU digital space.

In addition, the European Commission noted approval of the Digital development plan of the State Tax Service of Ukraine until 2030. The next stage is development of a roadmap for implementation of the IT solutions necessary to meet requirements related to Ukraine’s accession to the European Union.

Equally important direction is strengthening of the anti-corruption measures. In October 2025, as part of development of the new anti-corruption program of the State Tax Service for 2026 – 2028, assessment of corruption risks was carried out, measures to influence them were determined, and the two-year draft project was introduced to create single authorized unit for the corruption prevention and detection. As part of this project, a single department for corruption prevention and detection was created within structure of the State Tax Service, which will increase effectiveness of responding to the corruption risks. 

Such steps are important for Ukraine’s further integration into the European economic area and creation of a stable tax policy compatible with the EU norms.