European Commission publishes its assessment of Ukraine’s progress on the path toward EU membership

This year, Ukraine received its highest evaluation in the last three years within the Enlargement Package. The report confirms steady progress in implementing EU norms and standards.

Please find bellow some insights from EU4PFM Team, as the Programme was supporting and stands ready to continue supporting the MoF, the STS and the SCS in preparation to EU accession.

Under Chapter 29 “Customs Union”, the Commission focused on three key areas: legislation, digitalisation, and administrative capacity. The document assesses the implementation of recommendations from last year’s report and defines the customs administration’s priority tasks for the upcoming year.

It notes that “Ukraine has a good level of preparation in the area of the Customs Union and has made significant progress over the past year”, while “the Commission’s recommendations from last year have been only partially implemented and remain valid.”

This assessment was largely driven by the endorsement of the draft of the new Ukrainian Customs Code in line with the EU Customs Code by the Cabinet of Ministers, the update of the Medium-Term Action Plan for achieving customs reform goals, further digitalisation, and preperations for competency-based human resource management

The European Commission also highlighted the expanded use of the Common Transit Procedure, progress in upgrading the NCTS to Phase 6, and the increase in the number of Authorised Economic Operators (AEOs) to 100, including 5 granted the status of AEO for safety and security.

As a step toward accessing and interacting with the EU electronic customs environment, the Commission commended the development of technical specifications for the new Customs Clearance System and the Risk Management System, aligned with EU standards, and the launch of a customs decision system, equivalent to the European customs decisions system, introduced to process applications on AEO authorisations and authorisations for simplifications, including transit. However, the processes are not supported with adequate human and IT resources.

The Commission emphasised the need to strengthen anti-corruption measures and complete the reform of the State Customs Service (SCS), including granting it law enforcement powers.

Key priorities for the coming year include:

• Adopting the new Customs Code of Ukraine and developing secondary legislation;
• Continuing implementation of the Strategic Digitalisation Plan of the SCS for 2024–2026 in line with the EU Customs Code Work Programme and MASP-C;
• Advancing the development of new national IT systems for customs clearance and risk management;
• Granting the SCS law enforcement powers to combat smuggling effectively;
• Completing the SCS reform (including appointment of the new Head and staff re-certification) and accelerating the introduction of the competency-based HR management system.

The EU4PFM Programme remains committed to supporting the State Customs Service in advancing these reforms — particularly in the areas of digitalisation, human resource development,  anti-corruption activities, and alignment with EU customs legislation – to strengthen Ukraine’s preparedness for EU membership.

In the area of internal control, the Chapter 32 of 2025 Enlargement Report notes that Ukraine’s Public Internal Financial Control (PIFC) system is well-designed, while implementation still varies across institutions. Most central bodies have internal audit units and are gradually shifting from compliance to assurance and advisory work in line with GIAS-2025.

Delegated managerial accountability is set in law, and risk-based internal control is being integrated into planning and daily operations.

The PIFC Department of the Ministry of Finance continues to guide methodology, coordination, and capacity building, and further strengthening of its mandate and resources is encouraged.

EU4PFM, together with the Ministry of Finance, will continue supporting PIFC implementation. Priorities include aligning national internal audit methodology with GIAS-2025, developing training and competency frameworks, and embedding risk-based internal control in routine management. EU4PFM’s practical assistance helps institutions translate the framework into everyday practice, using approaches that can be adapted and scaled as capacity grows. Support will also extend to establishing and ensuring the effective work of audit committees, with the shared aim of consistent and effective PIFC.

Ukraine has also made good progress in the area of taxation notably by amending the Tax Code on value added tax (VAT) and excise duties. Chapter 16 “Taxation” covers value-added tax (VAT), excise duties and aspects of corporate taxation. It also deals with cooperation between tax administrations, including the exchange of information to prevent fraud, tax evasion and tax avoidance as well as operational capacity and digitalization of the revenue administration.

Good progress was made, on administrative cooperation and mutual assistance, as in August 2025, the MoF approved the implementation of certain requirements of the Directive on Administrative Cooperation (DAC) 1, including clear deadlines for responding to requests from Member States’ tax authorities, rules on group requests, and procedures for managing incoming and outgoing requests.

The report also notes enhanced operational capacity and digitalisation within the State Tax Service (STS), which contribute to more effective tax administration and a more transparent tax system.

Among other achievements is the approval of the Action Plan for implementing the Competency-Based Strategic HR Management Model for the STS for 2025–2030.

The Commission also highlighted the approval of the Digital Development Plan of the STS until 2030. The next step will be developing a roadmap for implementing IT solutions necessary for fulfilling Ukraine’s EU accession-related requirements.

In addition, the functionality of the STS information and communication systems has been improved through connection to the EU VAT Information Exchange System (VIES). This allows verification of VAT identification numbers registered in EU Member States—a key step toward Ukraine’s integration into the EU single digital space.

The Commission’s recommendations from last year were partially implemented and remain valid. In the coming year, Ukraine should in particular:

• further align national legislation with the EU acquis on the common system of VAT and on excise duties, especially regarding procedures, rates and exemptions, and continue implementing the National Revenue Strategy;
• further align with the Anti-Tax Avoidance Directive and the directives on mutual assistance and administrative cooperation in the field of taxation;
• continue strengthening the administrative and operational capacity of the tax.

The EU4PFM Programme stands ready to continue supporting the State Tax Service in implementing EU-aligned reforms — particularly in strengthening administrative and IT capacities for the application of EU directives on indirect and direct taxation, administrative cooperation ,  as well as in advancing digitalisation, human resource development, and tax policy harmonisation to further align with EU acquis.