The new law on "Euro-3": will commercial equipment become more affordable?
Tomorrow, May 27, 2022, the law lowering the environmental standard of imported commercial equipment to the Euro-3 level will enter into force. However, with many restrictions and conditions that will not allow you to take full advantage of the changes. The Auto Market Research Institute looked into whether commercial vehicles will become more affordable.
Until today, the ecological standard "Euro-2" applied to the import of used cars, and "Euro-5" applied to all other categories of motor vehicles. The law passed in May lowers this standard to the Euro-3 level. In practice, these are usually cars manufactured after 1999. The list includes almost all categories of commercial vehicles, except tractor -trailers. Namely, the following commodity item codes in accordance with the UCT of the ZED:
- 8702 — buses
- 8704 — trucks (all types, weighing both up to 3.5 tons and over)
- 8705 — special equipment (mobile cranes, concrete mixers, etc.).
However, not everything is so simple. The law contains a significant number of conditions and restrictions that significantly narrow its effect and almost completely eliminate it.
Only for legal entities
The law applies exclusively to legal entities. Natural persons, including entrepreneurs, will not be able to use the law. Namely, small and medium-sized businesses in most cases need an inexpensive vehicle to carry out business activities.
In 2021, only a third of the total number of imported trucks and buses were first registered by legal entities (31%). The potential number of people interested in buying commercial vehicles from abroad could be approximately the same, if it were not for other restrictions.
For personal use only
Use of the vehicle imported under the new conditions is allowed only for personal use by these legal entities. In simple words, the car must be imported and registered in the service center for the same company.
There is also a question regarding the interpretation of "own" use. Does this mean that it is illegal for a person who is not employed by the company to whom the car is registered to hire or drive such a vehicle? Since the legislators did not foresee any responsibility for non-compliance with this requirement, the question remains unanswered.
It is not possible to sell for 3 years
Alienation of cars imported under the new law is prohibited within 1,095 days from the day of the first state registration. And this is three years, during which an already not new vehicle can simply exhaust its resource. That is, there will be nothing to sell. But this is not the worst thing in this situation.
It is forbidden to use the services of intermediaries
It will not be possible for companies that trade in vehicles to bring a car and sell it to another person. This will create additional problems and further narrow the circle of those who would like to buy a car abroad. After all, the legislation requires that a natural person who wants to import goods must be a subject of the FTA — with all the requirements of this status.
To begin with, you need to register with the customs authorities; then conclude a foreign economic agreement (contract) with the seller of the vehicle (in practice, foreign sellers in most cases refuse to do so, unless it is an expensive vehicle or a large lot); receive a bill (invoice); buy currency on the interbank foreign exchange market; pay for the goods; issue a complete package of export-import documentation; act as a declarant (recipient) of imported goods.
For a small company planning to purchase one or more inexpensive minivans for the transportation of goods, this whole procedure may be, firstly, confusing and difficult, and secondly, economically unprofitable — the costs of legal support for all transactions and operations may be greater than the potential benefit when buying a car in Ukraine.
In practice, cases are not excluded when cars will be registered by intermediary companies and left on the balance sheet, giving them for use by those who really need them.
The excise tax remains
"Zero" customs clearance, which is in effect today, applies only to natural persons. Legal entities for which the Euro-3 standard will apply will have to pay taxes in full.
Today, depending on the age of cargo vehicles, an increasing factor for the excise tax of x40 or x50 is established; for buses — x40. As a result, this tax can be considered prohibitive for trucks over 5 years old and buses over 8 years old. In most cases , it will not make economic sense to import such vehicles, because the sum of all costs will rarely be less than the price of a similar car in the domestic market. The exception may be certain categories of special equipment, which are not enough in the domestic market — mobile cranes, concrete mixers, garbage trucks, etc.
What is the result?
Commercial machinery is needed for the reconstruction of Ukraine. At the same time, the demand for trucks and buses over 5 years old is the greatest, primarily due to the low purchasing power of Ukrainians. This creates a shortage of commercial vehicles, blocks the development of small and medium-sized businesses, forces carriers to keep in operation outdated equipment that is dangerous in all respects and was produced in the times of the USSR. The average age of trucks on the domestic market is 17.7 years, buses is 17.8 years. This indicates the need to update the fleet of commercial vehicles in Ukraine.
According to the results of 2021, more than 20% of the truck market is occupied by Soviet, Russian or Belarusian products — vehicles of the brands GAZ, KAMAZ, MAZ, ZyL and others. A significant part of the bus market is occupied by buses of the brands BAZ, I-Van, Bohdan, Ruta, CHAZ, etc., which, although manufactured in Ukraine, are made of foreign components on cargo chassis that do not meet modern European standards and norms, and almost 10% on the market are used buses of Russian and Belarusian production (PAZ, GAZ, MAZ, etc.).
The further operation of such vehicles is in doubt due to the ban on trade with Russia, and most of the spare parts and consumables for them were supplied from these countries. Mass decommissioning of such vehicles against the background of increased demand will in turn deepen the deficit in the market. It is possible to satisfy it, first of all, by importing used trucks and buses from abroad, because the growth of the fleet of commercial cars in Ukraine occurs mainly through the first registrations of imported vehicles with mileage.
A stimulus for the development of the market and the import of commercial equipment — cargo, construction, loading, agricultural machinery, buses and other types of vehicles critically necessary for the development of the economy — could be a new law on lowering environmental standards, if it acted without restrictions, and together with the abolition of the excise tax tax However, in the current edition, the practical benefit of such a decision turned out to be completely negated.