Excise tax on converted vehicles: calculation and payment

PRO 71.68

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Sobianina Olena

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Ukraine / Odessa region

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Publication date: 29.05.2024

lawyer, 23 years of experience in enforcement.

Excise tax on converted vehicles: calculation and payment

According to clause 212.1.14 of the Tax Code of Ukraine (hereinafter - PKU), an individual who is the owner of a cargo vehicle imported into the customs territory of Ukraine with subsequent conversion into a passenger car, and who has paid the corresponding excise tax, is determined by the party responsible for this tax.

For the conversion of a cargo vehicle of commodity item 8704 according to UCT ZED into a passenger car of commodity item 8703 according to UCT ZED, the date of occurrence of the tax liability is determined by the date of submission of the document confirming the compliance of the converted vehicle with the requirements of the issued road safety rules. The owner of the converted vehicle is obliged to pay the excise tax before submitting the necessary documents for registration or re-registration of the vehicle to the relevant state authority that carries out the registration of vehicles (in accordance with clause 216.11 of the Code of Civil Procedure).

At the same time, according to clauses 222.2.4 of the Civil Procedure Code, natural persons who are excise tax payers must provide proof of tax payment together with a bank/non-bank payment provider receipt or payment instructions indicating the date of execution when requesting registration or re-registration of converted cargo of a vehicle to a passenger car through the relevant vehicle registration authorities.

The taxpayer is responsible for calculating the amount of tax debt, in particular for excise goods produced in the customs territory of Ukraine. Such a calculation is based on the objects of taxation, the tax base and the excise tax rates effective at the time of the tax liability (clause 217.1 of the Code of Civil Procedure). In addition, with the introduction of the Law of Ukraine "On Amendments to the Tax Code of Ukraine on Excise Taxation of Passenger Vehicles" dated November 8, 2018 No. 2611-VIII, a new excise tax system for passenger vehicles, including modified ones, is introduced. from cargo vehicles, introduced.

According to the legal procedures, the vehicle must be submitted to the relevant authorities for state registration or re-registration when the vehicle model is changed. This applies to cars that, before import, were classified under heading 8704 under the UCT of the ZED, and after conversion fall under the heading of 8703 under the UCT of the ZED. The excise tax rate for these vehicles is determined by applying the engine and age coefficients to the basic excise tax rates specified in paragraphs 215.3.5-1 PKU. It is important to note that the excise tax rate is determined in euros, so the amount of tax is calculated according to the official exchange rate of the hryvnia to the euro, established by the NBU. Such a rate is effective on the first day of the quarter in which the tax liability arises and remains unchanged during the quarter, as specified in clause 217.3 of the PKU.

Excise tax for the conversion of a cargo vehicle into a passenger car is paid by the owner of the converted vehicle at the place of residence under budget classification code 14020800, which refers to the excise tax on vehicles manufactured in Ukraine.

If taxpayers have difficulties in determining the code and amount of excise tax for converted cargo vehicles in accordance with the UCT EZ, they have the opportunity to seek help from the supervisory authority at the place of registration. Taxpayers, together with the application in an arbitrary form, must provide documentation on the conversion of the vehicle, including a document confirming compliance with the PBD.