Tax and accounting insights for Ukraine
25.03.24
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Government approves increase of excise tax rates to the European level

On March 22, the Government approved the Draft Law of Ukraine "On Amendments to the Tax Code of Ukraine on Approximation of Ukrainian Legislation to the EU Legislation in the Field of Excise Tax".

The revision of excise taxes is due to the need to harmonize national legislation with the EU legislation, which is currently relevant in view of Ukraine's status as a candidate country for EU membership.

The Draft Law proposes to amend the Tax Code of Ukraine in order to:

- bringing the classification of alcoholic beverages in line with the provisions of Council Directive 92/83/EEC in the part concerning the definition of the term "intermediate products" - wines and other fermented beverages, which are classified under codes 2204, 2205, 2206 according to the Ukrainian Classification of Goods for Foreign Economic Activity

- increase of the excise tax rate for intermediate products from UAH 8.42 to UAH 12.23 per 1 liter (by UAH 3.81), i.e. to the level of the current rate for sparkling wines and carbonated wines;

- bringing the excise tax rates on fuel to the minimum levels of such rates established in the EU gradually over 4 years.

Schedule of increase in excise tax rates on fuel (EUR per 1000 liters):

Name of fuel

I half of the year

2024

Second half of the year

2024

2025

2026

2027

2028

Motor gasoline

213,5

242,60

271,70

300,80

329,90

359

Diesel fuel

139,5

177,60

215,70

253,80

291,90

330

Liquefied natural gas

52

55,60

59,20

62,80

66,40

70

Motor fuel

alternative

162

184,08

206,16

228,24

250,32

272,4

The implementation of the provisions of the draft law will provide additional revenues to the state budget in the second half of 2024:

  • UAH 1.6 billion on average per month from fuel sales operations. This includes UAH 1.3 billion from excise tax and UAH 292 million from value added tax;
  • from sales of intermediate products - by UAH 4.5 million per month from excise tax (calculated based on the sales volumes envisaged in the State Budget of Ukraine for 2024).

This is important for maintaining the country's security, as all own revenues are directed to the security and defense sector.

CMU

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