The legislation on the reclassification of excise goods needs to be changed

11/ 02/ 2025

Listen to online Stop   According to member companies of the European Business Association, there is currently a discrepancy in tax and customs legislation concerning the change of the Ukrainian Classification of Goods for Foreign Economic Activity (UCGFEA) code for excise goods, for which samples were taken during customs clearance. When the State Customs Service changes the UCGFEA code for excise goods, it leads to a change in the excise tax rate and, in certain cases, requires the labeling of goods that were previously imported without excise stamps. At the same time, the current versions of the Customs and Tax Codes do not provide a clear procedure for taxpayers regarding the release of goods into free circulation with additional customs duty payments due to the absence or mismatch of excise stamps. As a result, such goods must be destroyed, and moreover, the importer may be held liable despite having no intention of violating import regulations. Another unresolved issue at the legislative level is the release of excise goods into free circulation based on a temporary customs declaration when samples have been taken. This results in discrepancies between the excise stamps affixed and the tax documentation. The business community of the EBA discussed this issue with representatives of the State Customs Service of Ukraine (SCS) and the State Tax Service of Ukraine (STS) at a meeting of the EBA’s Customs Committee on February 5. The discussion focused on the reasons and consequences of changing the classification codes for excise goods, particularly alcoholic beverages and tobacco products imported into Ukraine. The discussion primarily centered on the classification of products such as ciders and beers with additives, as well as the capabilities of modern laboratory testing conducted by the SCS laboratory. It is worth noting that the range of alcoholic beverages has significantly expanded in recent years, while tax and customs legislation has failed to keep pace with these developments. Consequently, meeting participants agreed on the necessity of preparing legislative amendments. As the next step, businesses will await written conclusions from the STS and SCS based on the meetings outcomes to formally initiate the process of drafting legislative amendments. Meanwhile, businesses will prepare proposals for legislative changes, which will be submitted to the mentioned authorities, the Ministry of Finance, and the Verkhovna Rada Committee on Finance, Taxation, and Customs Policy. The EBA appreciates the participants openness to dialogue with the business community and hopes that the necessary legislative changes will be implemented swiftly and efficiently in partnership with government authorities.

According to member companies of the European Business Association, there is currently a discrepancy in tax and customs legislation concerning the change of the Ukrainian Classification of Goods for Foreign Economic Activity (UCGFEA) code for excise goods, for which samples were taken during customs clearance.

When the State Customs Service changes the UCGFEA code for excise goods, it leads to a change in the excise tax rate and, in certain cases, requires the labeling of goods that were previously imported without excise stamps.

At the same time, the current versions of the Customs and Tax Codes do not provide a clear procedure for taxpayers regarding the release of goods into free circulation with additional customs duty payments due to the absence or mismatch of excise stamps. As a result, such goods must be destroyed, and moreover, the importer may be held liable despite having no intention of violating import regulations.

Another unresolved issue at the legislative level is the release of excise goods into free circulation based on a temporary customs declaration when samples have been taken. This results in discrepancies between the excise stamps affixed and the tax documentation.

The business community of the EBA discussed this issue with representatives of the State Customs Service of Ukraine (SCS) and the State Tax Service of Ukraine (STS) at a meeting of the EBA’s Customs Committee on February 5. The discussion focused on the reasons and consequences of changing the classification codes for excise goods, particularly alcoholic beverages and tobacco products imported into Ukraine.

The discussion primarily centered on the classification of products such as ciders and beers with additives, as well as the capabilities of modern laboratory testing conducted by the SCS laboratory. It is worth noting that the range of alcoholic beverages has significantly expanded in recent years, while tax and customs legislation has failed to keep pace with these developments. Consequently, meeting participants agreed on the necessity of preparing legislative amendments.

As the next step, businesses will await written conclusions from the STS and SCS based on the meeting’s outcomes to formally initiate the process of drafting legislative amendments. Meanwhile, businesses will prepare proposals for legislative changes, which will be submitted to the mentioned authorities, the Ministry of Finance, and the Verkhovna Rada Committee on Finance, Taxation, and Customs Policy.

The EBA appreciates the participants’ openness to dialogue with the business community and hopes that the necessary legislative changes will be implemented swiftly and efficiently in partnership with government authorities.