Tax law changes in Ukraine 2019

The Verkhovna Rada of Ukraine (further “VRU”) has amended the Tax Code of Ukraine (Bill No. 9260 Amending the Tax Code of Ukraine and Certain Regulations of Ukraine On Administration Improvement and Review of Certain Tax Rates (further “Bill No. 9260)). As a result, the following changes should enter into force on January 01, 2019:

1. The non-taxable value of international parcels will decrease from EUR 150 to EUR 100 from July 01, 2019. To apply this new rule, Bill No. 9260 proposes a transitional period from January 01, 2019 to June 30, 2019 during which goods with a total invoice value exceeding the equivalent of EUR 150 will be subject to VAT.
2. The excise tax rate on tobacco products will be indexed at 9% from July 01, 2019.
3. Zero-rate excise tax will be introduced for alcohol used for production of vinegar, perfume and beauty products as well as industrial-use products.
4. The electronic fuel control system will be improved from July 01, 2019, and this will allow increasing revenues from the excise tax on fuel. Actual fuel movement broken down in storage locations will be recorded in the Electronic Fuel Management System (further “SEART”).
5. The licensing of activities performed by all business entities engaged in fuel production, storage, wholesale and retail trade will be introduced.
6. Rental rates for subsoil use for oil and condensate production will increase by 2% (from 29% / 14% to 31% / 16% (depending on depth)) and for iron ore by 0.8% (from 8% to 8.8%).
7. The tax rate on carbon dioxide emissions will increase from UAH 0.41 per ton to UAH 10 per ton.
8. The State Fiscal Service of Ukraine will adopt all decisions for installment, deferment of cash liabilities or tax arrears, as well as for postponement of payment of installments, deferred amounts, and these decisions will be reported to the Ministry of Finance of Ukraine regardless of the amount declared for installment, deferment and regardless of the amount of installments, of deferred cash liabilities or tax arrears, and the outstanding amount of preliminarily provided installments, deferred cash liabilities or tax arrears.

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