Cabinet proposes annual UAH 25,000 tax on luxury cars made less than 5 years previously - draft Tax Code

The Cabinet of Ministers has proposed that the Verkhovna Rada impose in 2015 an annual tax of UAH 25,000 on luxury cars (with a diesel engine of over 2.5 liters and with a petrol engine of over 3 liters, and not older than five years).

The government proposes the introduction of respective amendments to the Tax Code, a draft of which was tabled in parliament on Tuesday, reported Interfax-Ukraine.

In addition, the draft Tax Code, in order to compensate for the cancellation of the first registration of vehicles fee, proposes increasing excise rates on cars, and includes trucks and buses in the list of excisable goods.

In addition, the new excise tax is to be imposed on cars that were imported as commercial cars (i.e. not subject to excise duty) and then reequipped as passenger cars.

In particular, it is proposed to set excise rates on new buses at EUR 0.003 per cubic centimeter of engine, and on used buses at EUR 0.007 per cubic centimeter. The excise rate on buses used for over eight years will grow 20 times.

The excise rate on new trucks, depending on the total weight, is to be set at EUR 0.01 to EUR 0.016 per cubic centimeter of engine, the rate on used trucks is to be doubled, and the rate on trucks older than eight years will increase by 20 times.

Excise duty on passenger cars, depending on the engine size and age, will increase by 0.4% to 8%, motorcycle rates (including mopeds) will grow by 0.7-3.3%.

The draft document also proposes introducing excise duty on electric motor vehicles at EUR 109.129 per vehicle.

The current wording of the Tax Code sets duty for the first registration of a vehicle, which is proposed to be cancelled, in hryvnias per 100 cubic centimeters of engine, in particular, for passenger cars (except for electric cars) – from UAH 3 for cars with an engine of up to 1,000 cubic centimeters to UAH 55 for cars with engines of 5,500 to 6,500 cubic centimeters, and for electric vehicles – UAH 0.5 per kW of engine power.

The transport fee for buses is UAH 5 per 100 cubic centimeters of engine size, for trucks - from UAH 15 per 10 cubic centimeters of an engine of up to 8,200 cubic centimeters to UAH 25 with an engine of more than 15,000 cubic centimeters. Motorcycle owners pay from UAH 3 to UAH 10 per 100 cubic centimeters of engine.