The government is preparing to adopt a bill to increase military tax rates.
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Among the proposed changes is a 15% military tax on the purchase of a new car.
Therefore, buyers have bought all the cars from car dealerships, car dealerships are empty, said the general director of the All-Ukrainian Association of Auto Importers and Dealers (VAAID) Oleg Nazarenko.
Buyers are trying to quickly buy the cars that are available to avoid paying an additional 15% of the new tax. But this effect will be short-lived, because then sales will stop and instead of increasing the budget, the government will see a decline, VAAID believes.
They also added that even the 5% deductions to the Pension Fund that buyers currently pay will be questionable. Because a 20% burden when buying a car is already a large sum, which buyers will take a very long time to get used to.
History of the issue
The government submitted draft law No. 11416 to the Verkhovna Rada 18.07.2024 “On Amendments to the Tax Code of Ukraine and Other Laws of Ukraine on the Peculiarities of Taxation during the Period of Martial Law.” This bill only deals with increasing taxes, the emergence of new fees and grounds for inspections and additional charges.
In particular, the government decided to impose a 15% military tax on transactions for acquiring ownership rights upon first registration of passenger cars, including electric ones.
The military tax is planned to be imposed on both the first registration of new cars and used cars that are registered for the first time in Ukraine. It is separately stated that this tax is also charged for the first registration of cars, including those equipped exclusively with electric engines (one or more). That is, the previous benefit for electric cars on non-payment of tax to the Pension Fund upon first registration remains, but the military tax is a new separate tax that will have to be paid for electric cars.
The value from which the new tax will be levied will be determined in accordance with the purchase and sale agreement, the barter agreement, the certificate from the customs authorities, the expert assessment report on the value of the vehicle, and other documents confirming this value, but not lower than the customs value indicated in the customs declaration.
The service centers of the Ministry of Internal Affairs will monitor the payment of the 15% military tax, and are now required to submit a summary to the tax authorities on a monthly basis.
The only exception when the 15% military tax may not be paid will be cases of providing cars to persons with disabilities in accordance with the legislation, which is subject to the first state registration in Ukraine by the territorial bodies of the Ministry of Internal Affairs.
Source: Racurs
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