Ukraine: cancels the utilisation fee for recycling imported vehicles

CMS Cameron McKenna, 
Kyiv, Ukraine, Wednesday, April 23, 2014

Published by U.S.-Ukraine Business Council (USUBC),
Washington, D.C., Wednesday, April 23, 2014

On 8 April 2014, the Ukrainian Parliament adopted changesto the Tax Code of Ukraine, which should positively impact the whole automotiveindustry.

Specifically, Parliament cancelled the utilisation feefor the future recycling of almost all vehicles imported to the country.

The fee was previously considered to be an ecological taxlevied on the owners of both new and used imported vehicles. The utilisationfee had to be paid prior to or on the day of submission of the customsdeclaration, and represented an additional heavy financial burden for thebuyers and owners of the vehicles. The rates of the utilisation fee depended ondifferent circumstances, including the kind of vehicle and whether the vehiclewas new or used, etc. The tax rate varied from a minimum of UAH 4,400 (approx.EUR 250, according to the current exchange rate), up to UAH 60,500 (approx. EUR3,350).

The abolishment of the utilisation fee is regarded as aprogressive step towards Ukraine’s integration into the European market and theharmonisation of Ukrainian legislation with European standards.

The law shall become effective from the date of itsofficial promulgation, which is expected soon. 

Law: Law of Ukraine on Amendments to the TaxCode of Ukraine (with respect to abolishment of the utilisation fee and exciseduty as regards reconfiguration of the vehicle). 

Authors:

OlexanderMartinenko, Senior Partner, olexander.martinenko@cms-cmck.com

OlgaBelyakova, Senior Associate, olga.belyakova@cms-cmck.com