Ukraine passes law to reduce duties on imported cars

Ukraine passes law to reduce duties on imported cars

#Ukraine has recently #reduced #tariffs on foreign-registered #cars #imported into Ukraine from #Europe. The respective #laws were passed by the Ukrainian Parliament on 8 November 2018 and signed by President Poroshenko on 23 November 2018.

Visit our website if you are interested in the #Ukrainian_economy or #doing_business in Ukraine.

On 8 November 2018, the Ukrainian Parliament, the Verkhovna Rada, passed bills reducing tariffs on cars imported into Ukraine. On 23 November 2018, Ukrainian President Petro Poroshenko signed the bills. Thus, on 25 November 2018, on the next day following the proclamation, Laws No. 8487 and No. 8488 came into force.

By passing the Laws, the Parliament adopted a new formula for calculating the excise duty: the base rate (EUR 50 for petrol vehicles and EUR 75 for diesel vehicles) multiplied by cubic capacity, multiplied by the age of the vehicle in full years, starting one year after its production.

For example, the excise duty on a 2015 petrol vehicle with a 2-liter engine would amount to EUR 200: EUR 50 (base rate) multiplied by 2 (liters) multiplied by 2 (years) = EUR 200. In contrast, the excise duty on a diesel vehicle with a 1.6-liter engine produced in 2013 would amount to EUR 480: EUR 75 (base rate) multiplied by 1.6 (liters) multiplied by 4 (years) = EUR 480.

At the second reading of the bills, the Parliament doubled the base rate for large vehicles: EUR 100 for petrol cars with an engine of over 3 liters and EUR 150 for diesel vehicles with an engine of over 3.5 liters.

Moreover, the Verkhovna Rada introduced a subsidy coefficient of 0.5 for cars which will be customs cleared within 90 days after the entry into force of the Laws, with the excise duty cut in half.

However, owners of imported cars believe that the excise duties should be much lower than they currently are. Moreover, owners of imported vehicles have to additionally pay 20% VAT, 10% import duty and a pension fund contribution of 3-5%.

According to the State Fiscal Service of Ukraine, as of 20 December 2018, nearly 6,500 foreign-registered cars were customs cleared in Ukraine. Earlier, high customs clearance fees for cars imported from Europe triggered numerous protests of car owners in Ukraine.

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