In accordance with Articles 9, 13 of the Law of Ukraine “On the Principles of State Regulatory Policy in the Field of Economic Activity” (hereinafter — the Law), we announce the publication on April 18, 2024 on the official website of the Ministry of Internal Affairs of Ukraine of the draft resolution of the Cabinet of Ministers of Ukraine “On Amendments to the Procedure for Wholesale and Distribution retail trade in vehicles and their constituent parts bearing identification numbers concerning the settlement of the procedure for commission trade in vehicles” (hereinafter referred to as the draft resolution): https://mvs.gov.ua/normativna-baza-mvs/proekti-normativnix-aktiv/projekt-postanovi-kabinetu-ministriv-ukrayini-pro-vnesennia-zmin-do-poriadku-zdiisnennia-optovoyi-ta-rozdribnoyi-torgivli-transportnimi-zasobami-ta-yix-skladovimi-castinami-shho-maiut-identifikaciini-nomeri.
Draft resolution Draft amendments Comparative table
Explanatory note Regulatory impact analysis
The Tax Code of Ukraine establishes the procedure for taxation of transactions for the sale or exchange of movable property objects, which provides that the income from the sale (exchange) of a car, motorcycle, moped is determined on the basis of the price specified in the contract of sale (exchange), but not lower than the average market value relevant vehicle or not lower than its estimated, market value, determined by law (at the choice of the taxpayer).
In the case of sale (exchange) of an object of movable property through the mediation of a legal entity (its branch, branch, other separate division) or representative office of a non-resident or individual — entrepreneur, or conclusion and execution of contracts for the alienation of vehicles in the presence of officials of bodies carrying out registration (re-registration) vehicles, such intermediary or the relevant body performs the functions of a tax agent in relation to the submission to the supervisory authority of information on the amount of income and the amount of tax paid to the budget in the manner and in the deadlines established for the tax calculation, and the taxpayer at the time of the conclusion of the contract is obliged to independently pay to the budget tax on income from operations on the sale (exchange) of movable property objects.
At the same time, today, the Procedure for the implementation of wholesale and retail trade in vehicles and their component parts having identification numbers, approved by the Resolution of the Cabinet of Ministers of Ukraine dated November 11, 2009 No. 1200, does not provide for the submission by individuals of a document confirming the cost of the vehicle, under the time of conclusion of the contract of sale with business entities that carry out commission trade in vehicles and, accordingly, are tax agents.
This situation contributes to the deliberate underestimation of the cost of vehicles in order to reduce the amount of relevant taxes and payments payable on income from the sale of movable property.
In order to solve this problematic issue, the Ministry of Internal Affairs of Ukraine has developed a draft resolution that will provide for the mandatory submission of a document confirming the cost of the vehicle for the conclusion of a contract of sale and will make it impossible to intentionally understate the cost of vehicles owned by individuals.
Comments and proposals on the draft resolution from individuals and legal entities, their associations are accepted within a month from the date of publication in writing to the postal address: ul. Lukianivska, 62, m. Kiev, 04052 or to the e-mail address: [email protected].
Electronic consultations with the public are also being conducted on the draft resolution.
