Ukraine signs 2019 tax code amendments into law

11/ 12/ 2018

On 10 December 2018, the President of Ukraine signed Law No. 2628-VIII dated 23 November 2018 On Amendment of the Tax Code and Certain Other Legal Acts of Ukraine in Relation to Improvement of Management and Revision of Certain Taxes (the “Law”), which introduces amendments aimed at balancing the State Budget and improving the administration of taxes. The most significant amendments introduced by the Law include: Improving the system for control over movement and storage of excise goods, such as fuels; Introducing 0% rate of excise tax for supply of pure alcohol as a component in the production of cosmetics and other listed products; Indexing excise tax rates on tobacco products at 9% annually; Increasing royalty rates on the extraction of oil and condensate from 29%/14% to 31%/16% (depending on depth of the extraction wells); Extending the VAT exemption on the import and supply of certain medical products until 31 December 2020; Extending the VAT exemption on the import of electrical vehicles until 31 December 2022; Introducing a VAT exemption on the import of equipment for renewable power plants (including solar panels, wind turbines) to apply until 31 December 2022; and Decreasing the maximum non-taxable value of incoming cross-border parcels from EUR 150 to EUR 100 (starting 1 July 2019). The Law has been published and is scheduled to enter into force on 1 January 2019. Most of the amendments will enter into force with the Law, while amendments for the administration of excise tax will be gradually applied throughout 2019. For more information on these amendments and how they could affect your business, please contact authors of this publication. Authors: Olexander Martinenko, Senior Partner, [email protected] Viktoriia Stavchuk, Associate, [email protected] Anna Pogrebna, Partner, [email protected] Andriy Sydorenko, Associate, [email protected]

On 10 December 2018, the President of Ukraine signed Law No. 2628-VIII dated 23 November 2018 On Amendment of the Tax Code and Certain Other Legal Acts of Ukraine in Relation to Improvement of Management and Revision of Certain Taxes (the “Law”), which introduces amendments aimed at balancing the State Budget and improving the administration of taxes.

The most significant amendments introduced by the Law include:

Improving the system for control over movement and storage of excise goods, such as fuels;
Introducing 0% rate of excise tax for supply of pure alcohol as a component in the production of cosmetics and other listed products;
Indexing excise tax rates on tobacco products at 9% annually;
Increasing royalty rates on the extraction of oil and condensate from 29%/14% to 31%/16% (depending on depth of the extraction wells);
Extending the VAT exemption on the import and supply of certain medical products until 31 December 2020;
Extending the VAT exemption on the import of electrical vehicles until 31 December 2022;
Introducing a VAT exemption on the import of equipment for renewable power plants (including solar panels, wind turbines) to apply until 31 December 2022; and
Decreasing the maximum non-taxable value of incoming cross-border parcels from EUR 150 to EUR 100 (starting 1 July 2019).

The Law has been published and is scheduled to enter into force on 1 January 2019. Most of the amendments will enter into force with the Law, while amendments for the administration of excise tax will be gradually applied throughout 2019.

For more information on these amendments and how they could affect your business, please contact authors of this publication.

Authors:

Olexander Martinenko, Senior Partner, o[email protected]

Viktoriia Stavchuk, Associate, [email protected]

Anna Pogrebna, Partner, [email protected]

Andriy Sydorenko, Associate, [email protected]