In Ukraine, tax on car sales increased: new rules

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The law establishes an increase in sales tax for the year from the third unit of the vehicle

In Ukraine, increased taxes on car sales: new rules. Photo: Yakar

On May 23, 2020, amendments to Ukraine’s tax code came into force, providing for an increase in tax on the sale of cars. The innovations should not affect most motorists, as the average person changes the car every few years. This law applies to the sale of cars from January 1, 2020.

This was facilitated by the adoption of Bill No. 1210, in which a portion of the change affects the automotive sector. Specifically, the law introduces sales tax on the third unit of a vehicle for the year.

According to the old rules, during the third and subsequent car sales during a year, the state was required to pay 5% of the cost, now 18%. The new tax applies not only to cars, but also to any other transportation including trailers, mopeds and motorcycles. The first sale of the vehicle is tax-free. If there are two vehicles, the state will have to pay 5% of its price as before.

If we are talking about the sale of a bus, truck, tractor, special equipment and other movable property, then 5% of the estimated cost is levied on the first operation of the tax year. In this case, the stake is placed on the resellers, who will either have to get out of the shadows and pay taxes or give up the illegal trade.

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Recall, Ukraine’s President Vladimir Zelensky signed the law “Amending the Tax Code of Ukraine regarding reforms in tax administration, elimination of technical and logical discrepancies in tax law.” According to the new law, many changes are envisaged to improve and simplify the system of tax administration, which makes it applicable to world standards.

Read: Malleable Tax Law No. 1210: To End Those Who Did Not Kill Coronacrisis?


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