RESTRICTEDWORLD TRADE
ORGANIZATIONWT/ACC/UKR/78
17 April 2000
(00-1550)
Working Party on the
Accession of UkraineOriginal:  English
WORKING PARTY ON THE ACCESSION OF UKRAINE
Excise Duty and Value Added Tax - Memora ndum on the Application of Indirect Taxes
The following information on Excise Duty and Value Added Tax – Memorandum on the
Application of Indirect Taxes has been received from the Governmental Commission on Ukraine's
Accession to the WTO.
_______________
Ukraine is drafting a new Tax Code which introduces a uniform approach in the taxation of
all categories of taxpayers, reduces tax pressures, and assures compliance with international tax
treaties etc.
This Code has been designated by the President of Ukraine as a priority draft law to be
submitted for expedited consideration by the Verkhovna Rada of Ukraine.
1. Value Added Tax (VAT)
Pursuant to Law of Ukraine “On Value Added Tax”, the following operations and
transactions are subject to VAT: transactions by taxpayers involving the sale of goods (works,
services) within Ukraine’s customs territory; import (mailing) of goods into Ukraine’s customs
territory and the receipt of work (services) rendered by non-residents for or in connection with the useor consumption of such goods within Ukraine’s customs territory, including import (mailing) of assets
under lease arrangements, pledge and mortgage contracts; export (mailing) of goods from Ukraine’s
customs territory and the performance of services (work) for the use or consumption of such goods
outside Ukraine’s customs territory.
VAT applies to goods at customs checkpoints on the basis of the ‘country of designation’
principle, i.e. taxation of goods brought into a country of designation complies with the internationally
recognized rules which are observed by Ukraine.
The tax base is the contract value of imported goods, which may not be lower than the
customs value that is entered in a cargo customs declaration, together with costs connected with
shipment, loading, unloading, reloading, and insurance at Ukrainian border crossings, payments of
broker and agent fees, commissions and other fees connected with import (mailing) of such goods,
excise duties, import tariffs and other taxes and charges (obligatory payments), except the VAT,
which is included into the price of goods. The calculated value is converted into Ukrainian Hryvnya(UAH) at the official exchange rate of the National Bank of Ukraine effective on the day of payment.
Tax rates: 20 per cent, zero, exemption.WT/ACC/UKR/78
Page 2
The Law of Ukraine “On the Value Added Tax” sets a 20 per cent rate of VAT with respect to
imported goods.
The Law of Ukraine “On Value Added Tax” prov ides that export of goods from Ukraine’s
customs territory (irrespective of the country of destination) is taxed at a zero rate, i.e. exported goodsare not subject to VAT and, in addition, VAT taxpayers are entitled to recover (except in cases of
export of goods under barter arrangements) amounts of VAT paid to suppliers for raw materials that
were used in the production of exported goods (or paid for exported goods – in middleman
transactions).
The zero tax rate is applied to transactions specified in Item 6.2 of the Law.
The Law does not provide a list of goods, which are subject to VAT, but enumerates
transactions which are VAT exempt (set out in Article 5 of the Law of Ukraine “On the Value Added
Tax”).
Item 7 of the Law of Ukraine “On the Introdu ction of Amendments and Changes to Certain
Legislative Acts of Ukraine” No.1523-111 of 2 March 2000 repeals the list of critical import goods
determined by the Cabinet of Ministers of Ukraine authorized by Paragraph 11, Item 11.5 of
Article 11 of the Law of Ukraine “On the Value Added Tax”.
2. Excise Duty
Issues relating to the imposition of excise duties are governed by the Decree of the Cabinet of
Ministers of Ukraine “On the Excise Duty” No. 18-92 of 26 December 1992, as amended. Pursuant to
this Decree excise duty is levied on commercial transactions with excisable goods produced in
Ukraine, by means of sale, exchange for other goods (products, works, services), transfer of goods(products) free of charge or with partial payment therefor; proceeds from sales (transfer) of goods
(products) for personal consumption, commercial processing (except proceeds from sales (transfer)
transactions for production of excisable goods) and for employees; the customs (or if not available –
purchase) value of imported goods (products) acquired for a foreign currency, via exchange or free-
of-charge transfer.
The list of goods which are subject to the excise duty and excise rates are determined by
respective laws of Ukraine, and particularly:
− the Law of Ukraine “On Excise Rates and Import Tariffs for Tobacco Products” No.
30 of 6 February 1996, as amended;
− the Law of Ukraine of “On Excise Rates and Import Tariffs for Certain Transport
Vehicles and Tires thereto” No. 216 of 24 May 1996, as amended;
− the Law of Ukraine “On Rates of the Excise Duty and Import Tariffs for Ethanol and
Alcoholic Beverages” No. 178 of 7 May 1996, as amended.
The aforementioned laws also provide for temporary privileged rates with respect to certain
domestically produced goods.
The Law of Ukraine “On the Introduction of Amendments and Changes to Certain Laws of
Ukraine regarding Issues of Taxation of Excisable Goods (Products)” No. 1214 of 4 November 1999,
has reduced the category of excisable goods to five products: alcoholic beverages (including beer),
tobacco, jewelry, oil products and automobiles.WT/ACC/UKR/78
Page 3
This Law also sets out excise rates for cigars, tobacco cigarettes, tobacco products and
tobacco in the national currency rather than in th e EURO, as was the case before, and reduces excise
rates for tobacco cigarettes from 2.5 EURO to UAH 10 per 1,000 pieces.
List of Commodities Subject to Excise Duty
Name of Commodity under
Ukrainian Classification of Foreign
Trade CommoditiesExcise Duty for Importers Legislative act
2203.00 Beer (malt) 0.02 EURO/1 litre LU № 1214 –XIV
04.11.99
22.04 (except2204 10, 220430)Natural wines, including fortified
wines0.15 EURO/1 litre LU № 178
7.05.96
2204.10 Sparkling wines (carbonated),
champagne, including champagne
wines containing in their names the
word “Champagne”0.3 EURO/1 litre LU № 178
7.05.96
22.05 Vermouths and other natural grape
wines with additions of plant oraromatic extracts:0.5 EURO/ 1 litre LU № 178
7.05.96
2206.00 Other fermented beverages (apple
and pear cider (perry), pear liqueur,honey beverages);0.5 EURO for 1 litre LU № 178
7.05.96
22.07 Ethanol non-denatured, with
alcohol content exceeding 80%,
ethanol and other non-denatured
spirits with any alcohol content3 EURO/1 litre of 100% spirit LU № 178
7.05.96
22.08(except 2208.10900 – onlycognac spirit)Ethanol non-denatured, with
alcohol content of less than 80%,nastoiki, liqueurs and otheralcoholic beverages, semi-finishedspirit components used for
production of beverages3 EURO/ 1 litre of 100% spirit LU № 178
7.05.96
2208.10 900 Cognac spirit 0 LU № 178
7.05.96
24.01 Tobacco, tobacco waste products 0 LU of 06.02.96 № 30
24.02.10 000 Cigars, including cigars with cut-
off ends, cigarillos [thin cigars],
others20 UAH/100 pcs LU of 06.02.96 № 30
2402.20 000 Cigarettes 10 UAH/ 100 pcs LU of 06.02.96 № 30
2402.20 000 Only filter-less cigarettes (for
Ukrainian enterprises)LU of 06.02.96 № 30
24.03 (except
2403 10000,240399100)Other industrially produced tobacco
and industrial substitutes0 LU of 06.02.96 № 30
2403.10 000 Tob acco for smoking (including
tobacco with substitutes or no
substitutes in any proportion)10 UAH/kg. LU of 06.02.96 № 30
2403.99 100 Tobacco for chewing, tobacco for
snuff10 UAH/kg. LU of 06.02.96 № 30WT/ACC/UKR/78
Page 4
Name of Commodity under
Ukrainian Classification of Foreign
Trade CommoditiesExcise Duty for Importers Legislative act
2710.00 110 Light distillates: for specific
processing operations12 EURO/1000 kg. LU № 1214-XIV
04.11.99
2710.00 150 For chemical transformations in
processing operations other thanthose provided in Category
2710.0011012 EURO/1000 kg. LU № 1214-XIV
04.11.99
2710.00 210 Special petrol: white-spirit 12 EURO/ 1000 kg. LU № 1214-XIV
04.11.99
2710.00 250 Others 20 EURO/ 1000 kg. LU № 1214-XIV
04.11.99
2710.00 310 Motor petrol: aviation petrol 20 EURO/ 1000 kg. LU № 1214-XIV
04.11.99
2710.00 370 Motor petrol: jet petrol 20 EURO/ 1000 kg. LU № 1214-XIV
04.11.99
2710.00 390 Motor petrol: other light fractions 20 EURO/ 1000 kg. LU № 1214-XIV
04.11.99
2710.00 410 Medium distillates: for specific
processing operations20
EURO/1000 kg.LU № 1214-XIV
04.11.99
2710.00 450 Medium distillates: for chemical
transformations in processingoperations other than those
provided in Category 2710.0041012 EURO/1000 kg. LU № 1214-XIV
04.11.99
2710.00 330 Auto petrol A-72, A-76, A-80, A-
90, A-92, AI-93, A-94, A-95, A-96,
A-98 and motor petrol of othertypes40 EURO/1000 kg. LU № 1214-XIV
04.11.99
2710.00 330 Only motor petrol with content of
not less than 5% of high-octaneoxygen-containing additions А-
76Ек, А-80Ек, А-92Ек, АІ-93Ек,
А-95Ек, А-98Ек.20 EURO/1000 kg. LU № 1214-XIV
04.11.99
2710.00 350 Auto petrol A-72, A-76, A-80, A-
90, A-92, AI-93, A-94, A-95, A-96,A-98 and motor petrol of othertypes40 EURO/1000 kg. LU № 1214-XIV
04.11.99
2710.00 350 Only motor petrol with content of
not less than 5% of high-octaneoxygen-containing А-76Ек, А-
80Ек, А-92Ек, АІ-93Ек, А-95Ек,
А-98Ек.20
EURO/1000 kg.LU № 1214-XIV
04.11.99
-- For other purposes:
--- kerosene:
2710.00 510 ---- jet fuel 12 EURO/1000 kg. LU № 1214-XIV
04.11.99
2710.00 550 ---- others 20 EURO/1000 kg. LU № 1214-XIV
04.11.99
2710.00 590 --- others 20 EURO/1000 kg. LU № 1214-XIV
04.11.99
- Heavy distillates
-- gasol
2710.00 610 --- for specific processing
operations10 EURO/1000 kg. LU № 1214-XIV
04.11.99WT/ACC/UKR/78
Page 5
Name of Commodity under
Ukrainian Classification of Foreign
Trade CommoditiesExcise Duty for Importers Legislative act
2710.00 650 --- for chemical transformations
in processing operations otherthan those provided inCategory 2710.0061010 EURO/1000 kg. LU № 1214-XIV
04.11.99
2710.00 690 --- for other purposes 10 EURO/1000 kg. LU № 1214-XIV
04.11.99
71.13  Jewelry, parts thereof made of
precious metals or metals plated
with precious metals55% LU № 1214-XIV
04.11.99
71.14 Products made by gold and silver
jewelers and parts of such productsmade of precious metals or metalsplated with precious metals55% LU № 1214-XIV
04.11.99
87.03 Cars and other transport vehicles
intended for carriage of people
(except automobiles up to Position
8702), including automobiles forcarriage of cargo and people, vansand racing cars
8703.10 - automobiles specially
designed to move on snow;special automobiles fortransportation of athletes to
golf playgrounds and other
transport vehicles0.6
EURO/cm
3LU № 216
24.05.96
- transport vehicles with
cylinder engines with sparkignition and others:
8703.21 -- with working engine volume
of no more than 1000 cm30.2EURO/cm
3LU № 216
24.05.96
8703.22 -- with working engine volume
exceeding 1000 cm3, but less
than 1500 cm30.2EURO/cm
3LU № 216
24.05.96
8703.23 -- with working engine volume
exceeding 1500 см3, but no
more than 3000 cm3
--- with working engine volume
exceeding 1500 cm3, but no
more than 2200 cm3
 (new and used engines)0.3 EURO/cm3LU № 216
24.05.96
--- with working engine volume
exceeding 2200 cm3, but no
more than 3000 cm3
 (new and used engines)0.6 EURO/cm3LU № 216
24.05.96
8703.24 -- with working engine volume
exceeding 3000 cm31.0 EURO/cm3LU № 216
24.05.96
- transport vehicles with
cylinder compression ignitionengines (diesel and half-diesel):
8703.31 -- with working engine volume
under 1500 cm3:
 (new and used engines)0.2
EURO/cm3LU № 216
24.05.96WT/ACC/UKR/78
Page 6
Name of Commodity under
Ukrainian Classification of Foreign
Trade CommoditiesExcise Duty for Importers Legislative act
8703.32 -- with working engine volume
exceeding 1500 cm3, but no
more than 2500 cm3:
(new and used engines)0.3 EURO/cm3LU № 216
24.05.96
8703.33 -- with working engine volume
exceeding 2500 см3:
 (new and used engines)0.8 EURO/cm3LU № 216
24.05.96
8703.90 - others 100 EURO/pcs LU № 216
24.05.96
87.11 Motor bikes (including mopeds)
and bikes with auxiliary engines,with or without side-cars:
8711.40 000 - with crankcase and con-rod
engines with spark ignition, whoseworking engine volume exceeds
500 cm
3, but is no more than 800
см3 0.2 EURO/cm3LU № 216
24.05.96
8711.50 000 - with working engine volume
exceeding 800 cm3 0.2 EURO/cm3LU № 216
24.05.96
8711.90 000 - others 0.2 EURO/cm3LU № 216
24.05.96
87.16 Trailers and half-trailers for all
transport vehicles; other non-self-propelled transport vehicles, partsthereof:
- camping trailers and half-trailers,the trailer house type:
-- others weighing:
8716.10 990 --- more than 3500 kg. 100 EURO/pcs LU № 216
24.05.96
List of Excise Duty Privileges
Code of
Commodity
under Ukrainian
Classification of
Foreign Trade
CommoditiesName of Commodity under
Ukrainian Classification of
Foreign Trade CommoditiesExcise Duty Temporarily
effective
privileged
ratesTerm of
effect of the
privileged
rate for
domestically
produced
commoditiesLegislative Act
2207,
2208 (except
2208.10.900)Ethanol non-denatured,
strong beverages,
liqueurs and other
alcoholic beverages*3 EURO /
1 litre of
100%
spirit2 EURO / 1
litre of 100%
of spirit01.07.2000 LU № 178
7.05.96 “On
Rates of Excise
Duty and ImportTariffs forEthanol andAlcoholicBeverages” as
amendedWT/ACC/UKR/78
Page 7
Code of
Commodity
under Ukrainian
Classification of
Foreign Trade
CommoditiesName of Commodity under
Ukrainian Classification of
Foreign Trade CommoditiesExcise Duty Temporarily
effective
privileged
ratesTerm of
effect of the
privileged
rate for
domestically
produced
commoditiesLegislative Act
2204.21.100-
2204.21.290;2204.29.100-2204.29.290Natural grape wines (fine
wines); grape winesordinary dry0.15
EURO / 1litre0.01 EURO /
1 litre01.01.2001
2204.21.310-
2204.21.510;2204.29.310-
2204.29.510Natural grape wines (fine
wines) and winesordinary fortified0.15
EURO / 1litre0.06 EURO /
1 litre01.01.2001
2205 Vermouths and other
natural grape wines0.5 EURO
for 1 litre0,15 EURO /
1 litre01.01.2001
2204.30 Fruit and berry wines 0.5 EURO
for 1 litre0,15 EURO /
1 litre01.01.2001
2204.30 Wine materials sold to
people0,15 EURO /
1 litre01.01.2001
2208.20 Cognacs and brandies of
more than 3 years old3 EURO
for 1 litre0,25 EURO /
1 litre01.01.2001
2208.10.900 Cognac spirit 0 0 01.01.2001
2402.20.000 Filter-less cigarettes UAH 10
for 1,000pcsUAH 7 for
1,000 pcs01.07.2000 LU of February
6, 1996 № 30
“On Rates ofExcise Duty and
Import Tariffs
for TobaccoProducts” asamended
Other transport vehicles**- 01.01.2007 LU of May 24,
1996.№ 216
“On Rates of
Excise Duty and
Import Tariffsfor CertainTransportVehicles andTires thereto” as
amended
* The excise rate for ethanol used by domestic producers for production of spirit juices, fruit drinks,
nastoikas and perfumes is equal to 0.2 ECU/1 litre of 100% spirit.
** No excise duty will be levied until 2007 on revenues from sales of cars, trucks, passenger automobiles
and motor bikes manufactured from foreign and Ukrainian made components and parts by Ukrainians
enterprises of all forms of ownership on condition that such enterprises will be producing no less than
1,000 items per year.
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