Tax reform passed for the duration of martial law

The Law of Ukraine on Amending the Tax Code of Ukraine and Other Legislative Acts of Ukraine to Improve Legislation for the Duration of Martial Law became effective on 5 April 2022.

Key developments from 5 April 2022 relating to customs payments:

• group 1-3 unified tax payers are exempt from VAT except for group 3 taxpayers with the simplified tax regime who have opted for a 3% unified tax rate
• group 3 unified tax payers who have opted for the special taxation for the duration of martial law (2% tax rate on revenue) are exempt from VAT
• goods imported by businesses except for alcohol, alcoholic beverages and tobacco products are exempt from customs duty
• imports of vehicles by individuals, in particular, cars, car bodies, trailers and semi trailers, motorcycles, vehicles with 10+ people capacity, and lorries are exempt from VAT, excise tax and customs duty.

However, please note that the above tax relief does not apply for imported goods and vehicles originating from the Russian Federation, Belarus and temporarily occupied territories.

Key developments relating to customs formalities:

• a moratorium has been imposed on documentary audits of customs compliance
• the requirement has been lifted to submit permits for imported goods covered by the special list of goods defined by the Cabinet of Ministers of Ukraine
• group 1-3 unified tax payers (except for group 3 taxpayers who have opted for the 3% tax rate on revenue) are permitted to declare imported goods by submitting an advance customs declaration
• the customs clearance of goods is accelerated to one business hour from presentation of goods to the customs authority
• customs clearance of goods outside of the location of customs authorities or out of business hours is free of charge
• a significant number of deadlines under the Customs Code of Ukraine are suspended (the period of temporary storage under customs surveillance, the period of storage under the bonded warehouse regime, the deadline for returning advance payments, etc.)
• goods that may qualify as items of cultural value, narcotics, psychotropic substances and precursors, radio electronics devices banned for import, military or dual purpose goods, hazardous waste, etc. based on their specifications and physical and chemical properties are admitted on the basis of the customs applicant’s statement that such goods are not subject to import bans and/or restrictions. Such goods are subject to post-surveillance.

Our team will continue to monitor customs and tax law developments during martial law. Please follow the updates.