Used cars imports to Ukraine rise sixfold

Business in Ukraine: Used cars imports to Ukraine rise sixfold

In January-October 2017, imports of second-hand vehicles to Ukraine increased by six times. Such an increase is attributable to the recent amendments to the Ukrainian Tax Code aimed at reducing the tax burden and promoting the development of the used car market. Both Ukrainian individuals and companies shall benefit from reducing excise duties.

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According to the press release of the State Fiscal Service of Ukraine, in January-October 2017, 6 times more used cars were imported to Ukraine as compared to the previous year, as reported by the Ukrainian customs authorities, which are responsible for the customs clearance of cars.

While on average, around 1,000 used cars used to be imported every month, this year, the monthly imports of second hand cars totalled 6,000. Only in October, the number of second-hand cars imported amounted to 7,000.

Over the first 10 months of 2017, 123 thousand cars were imported into the customs territory of Ukraine. On these imports, UAH 17.4 billion duties were paid to the Ukrainian state budget. The used cars amounted to 56 thousand out of a total of 123 thousand imported vehicles, bringing UAH 4.3 billion duties to the state budget.

According to the State Fiscal Service of Ukraine, such an increase is attributable to the recent amendments to the Ukrainian Tax Code aimed at promoting the development of the second hand car market. As a result of the amendments, the excise duty rates for pre-owned vehicles were reduced by 10-20 times. This resulted in reducing the tax burden, which is currently around 35-40 percent of the price of the car. Before the amendment took effect, the excise duties were so high that the tax burden on used cars amounted to 90 percent – almost as high as the price of the car itself.

The new regulations apply from 1 August 2016 (date of entry into force of amendments to the Tax Code of Ukraine) until 31 December 2018.

It should be noted that at the moment the imported pre-owned vehicles are offered for sale considerably cheaper to both individuals and legal entities.

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