Draft Law of Ukraine

"On Amendment of Some Laws of Ukraine On Excise Duty"

This draft amends laws of Ukraine “On Excise and Import Duty Rates for Ethyl Alcohol and Alcohol Drinks”, “On Excise and Import Duty Rates for Certain Goods (Products)”, “On Excise Duty and Import Duty Rates for Certain Transport Vehicles”, “On Excise Duty for and Tobacco Products”.

This draft raises the excise duty rate for ethyl alcohol not denatured and cognac (commodity items 2207, 2208 (except for 2208 10 9000) from 16 UAH to 17.4 UAH per 1 liter of 100% alcohol. This draft alters the procedure of excise duty payment. This procedure shall apply to purchases of ethyl alcohol to be used in perfumes manufacture.

When perfume manufacturer receives ethyl alcohol there shall be issued a tax bill for the amount of excise duty calculated for the volume of received alcohol. The tax bill is redeemed if the fact of alcohol usage for perfumes manufacture is evidenced by relevant documents.

There is a suggestion to fine untargeted use of ethyl alcohol in the amount estimated proceeding from the volumes of received alcohol that shall be increased by 120 percent of annual discount rate of the National Bank of Ukraine.

It is offered to cancel excise duty for jewelries, which are set forth in the Law of Ukraine “On Excise and Import Duty Rates for Certain Goods (Products)” and to increase excise duty rates for:

• malt beer (commodity item 2203) from 0.21 UAH to 0.23 UAH per 1litre;

• motor spirit containing not less than 5% of high-octane oxygen-containing agents per Technical Conditions of Ukraine [National Technical Standards] of the brands A-76Ek, A-80Ek, A-92Ek, AI-93Ek, A-95Ek, A-98Ek (commodity items 271000330, 271000350) from 20 EURO to 45 EURO per 1000 kg;

The Resolution of the Cabinet of Ministers of Ukraine N 47 of January 17, 2000 determined the list of oil-refining enterprises having the right to apply the rate equal to 45 EURO during production of the above brands.

The draft cancels excise duty privileges with regard to the sales of cars, vehicles transporting cargo and passengers and motorcycles produced by Ukrainian enterprises of all property forms. It should be noted that it also cancels excise duty privileges for sale of components used by Ukrainian enterprises in production of transport vehicles, stipulated in the Law of Ukraine “On Excise and Import Duty Rates for Certain Transport Vehicles”.