“OLX tax”: MPs have brought the law close to the finish line

“The OLX tax” is nearing the finish line: MPs have agreed an updated version of the bill on taxation of digital platforms, which does not introduce a new tax but changes the model for administering individuals’ income from online marketplaces. In essence, Ukraine is moving toward European practice, under which marketplaces, ride‑hailing, delivery and rental services become tax agents: they automatically submit data on users’ income to the Tax Service and, in some cases, withhold tax at the time of payment.

What the “OLX tax” really is
In its logic, this bill is a response to a global trend: more and more people earn income in the “digital economy” by selling goods, renting out property or providing services via platforms. Traditional tools for controlling individuals’ income work poorly here: transactions are fragmented, counterparties are private persons, and paperwork is minimal. Draft law No. 15111‑d proposes to change the control point: instead of trying to track each seller separately, the state turns to the “node” of the system — the platform itself.

That is why the informal label “OLX tax” has taken hold in public debate, although in fact it covers a wide range of services: OLX, Prom, Rozetka, Airbnb, Bolt, Uber, Glovo and other intermediaries between sellers and buyers or service providers and recipients. For users, this means that transactions previously invisible to the tax authorities will gradually become part of a transparent cash flow, and the platform will be obliged either to transmit data on income or to withhold tax from payouts.

What rules are proposed for sellers and service providers
In the revised bill, a high tax‑free threshold is proposed for household, occasional sales via platforms: up to 2,000 euros of annual income per individual is not taxed at all, which allows people to sell used items, occasionally rent out housing or take on one‑off jobs without excessive bureaucracy. If the activity becomes regular and income exceeds this threshold, a simplified regime kicks in: 5% personal income tax plus 5% military levy on the amount above the limit, provided that annual income does not exceed about 7–7.2 million UAH; at higher turnovers, the standard rates of 18% PIT and 5% military levy apply, effectively equating large online business to traditional models.

What role the platforms themselves will play
Digital platforms must collect and transmit data on users’ income to the tax authorities, effectively becoming the Tax Service’s “long arm”: they identify the seller, record payments and either report them or withhold tax when transferring funds. For Ukrainian services, this implies major IT and compliance restructuring, while for international players it means integrating Ukrainian requirements into global procedures, which on the one hand raises the entry barrier for new platforms, but on the other levels the playing field between those who comply with the rules and those who operate in the “grey zone”.

What will change for ordinary users
Despite loud headlines about the “OLX tax”, little will change in the short term for most occasional sellers. The high tax‑free threshold means that people who from time to time sell an old phone or furniture will remain outside the tax net even if the platform submits information on such transactions to the Tax Service. The bill is primarily aimed at those who effectively run a business through online platforms but do not register as entrepreneurs and do not pay tax on regular sales or services.

In the medium term, however, the “shadow” segment of online trade is likely to shrink significantly. Once platforms start collecting and automatically transmitting data, the space for completely ignoring tax obligations will narrow, and “playing hide‑and‑seek” with the Tax Service will become increasingly unprofitable. For users with stable online income, the logical step will be to legalise it by registering as an individual entrepreneur or by moving to the new simplified regime for platform‑based income, depending on their business model.

Why the bill is so controversial
The “OLX tax” is disputed because of fears of tighter state control over private finances and automatic data exchange between platforms and the tax authorities. There are concerns that additional requirements for services will either push some foreign platforms out of the market or make their services more expensive for users. There is also a risk of “overheating” the reform if other fiscal initiatives, such as changes to VAT or reliefs for cross‑border parcels, are attached to it before the second reading.

At the same time, supporters of the bill see it as a step toward tax fairness: online income should be taxed on a par with offline salaries and classic entrepreneurial income. The reduced rate for legalised platform income and the high tax‑free threshold protect one‑off household sales and offer a compromise: lower tax burden in exchange for transparency and rejection of shadow schemes.

If you have any questions or issues related to taxation of online income, choosing the optimal model for working via digital platforms or assessing risks for your existing sales and service schemes, seek professional advice — timely analysis will help you adapt to the new rules with minimal losses for your business.

Author: Ihor Yasko, Managing Partner of “WINNER” Law Firm, PhD in Law.