Major changes to the Ukrainian excise tax rules in 2017

Further to our newsletter on major changes to the Ukrainian tax rules in 2017, below we provide brief outline of some noteworthy changes to the excise tax rules in 2017.

Excise Tax Rates

The excise tax rates on a number of alcohol beverages have been increased by 10-20% on average. The excise duty for the beer has been increased by 12%. Exceptions are rates on natural wine that remain intact and on low-alcohol beverages that have been reduced. New rates on alcohol beverages being subject to marking will apply as of March 1, 2017. Specific excise tax rates on raw tobacco and tobacco products have gone up by 40%, while ad valorem tax rate on cigarettes remains intact. The excise tax rates on most types of fuel have been raised by 25% on average. No changes to the excise tax rates on vehicles and trailers, as well as electrical power.


The existing in 2016 excise tax on retail sale of fuel is cancelled. Sale of fuel in packages of up to 2 liters (except for sale by fuel manufacturers) is no longer subject to excise tax and thus no sanctions (fines or penalties) for non-compliance with certain filing requirements (e.g., registration of excise invoices) will apply to such transactions. From now on the following operations are exempt from the excise tax: import of unmanufactured raw tobacco by tobacco fermentation factories that further (i) sell manufactured (fermented) raw tobacco to tobacco product manufacturer or (ii) export such raw tobacco; sale of raw tobacco produced by raw tobacco manufacturers in Ukraine to tobacco fermentation factories; sale of manufactured (fermented) raw tobacco by tobacco fermentation factories to tobacco product manufacturers. At the same time, sale of raw tobacco to businesses other than tobacco fermentation factories and/or tobacco products manufacturers is now subject to a fine amounted to 200% of value of the sold raw tobacco. Tobacco manufacturers are allowed to pay the excise tax within 5 business days following the purchase of excise tax stamps. Late payment of the excise tax will result in the 20% fine. The law sets up monthly limit on quantity of excise tax stamps that can be sold to certain manufacturers and importers of tobacco products. From now on the law specifically clarifies the requirements for the excise tax stamps of the imported alcohol beverages. In particular, the amount of the excise tax on stamps shall correspond to the amount determined based on certain attributes (such as beverage's strength, bottle volume, and excise tax rates) present at the moment of the stamp's issue.

For further information please contact Asters' partner Constantin Solyar,
senior associate Maryna Golovko and junior associate Roman Podzizei.

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