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The committee "gave the go-ahead": how much will customs clearance cost in 2023?

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Today, February 2, the specialized "tax" committee of the Verkhovna Rada recommended adopting the draft law on customs clearance in "Diya" as a basis. However, the new rules are proposed to be introduced only during martial law. Experts from the Institute of Car Market Research explain what happened, what the new customs clearance rates might be, and when the system can become operational in practice.

What was considered in the committee?

Draft laws 7466 and 7468 dated 15.06.2022, initiated by the Cabinet of Ministers of Ukraine, on customs clearance of cars in Diya.

What is the decision of the "tax" committee?

Despite the fact that the majority of relevant ministries, committees and services spoke against the adoption of draft laws, the "tax" committee recommended their adoption in the first reading. There was only one amendment: the new rules will apply during martial law.

This means that the documents will soon be brought to the floor of the Parliament for consideration, and if they receive the necessary 226 votes of peopleʼs deputies, they will be discussed again in the committees.

What is the essence of the draft laws?

The Ministry of Digital Transformation announced the possibility to clear customs on a smartphone online, without visiting institutions and organizations. It will be enough to enter the VIN code of the car and upload copies of documents, and payments will be calculated automatically, according to a fixed formula. The size of the single payment will be affected only by the technical characteristics of the car.

The essence is simple, explains Peopleʼs Deputy, Deputy Chairman of the specialized "tax" committee Yaroslav Zheleznyak:

  1. A person buys a car
  2. Logs in to "Action"
  3. Enters the VIN code and additional data about the car
  4. "Diya" calculates the amount of customs payments
  5. A citizen pays customs fees (amount is blocked)
  6. A citizen signs a declaration in "Diya"
  7. The automatic system of customs clearance (ASMO) creates a customs declaration
  8. "Diya" sends data to ASMO
  9. The car arrives at the border
  10. The inspector checks the customs declaration, documents and car
  11. The bank debits money
  12. The car enters Ukraine

Who can use it?

The new rules will apply to both individuals and legal entities, but only passenger cars, both new and used. For other categories of vehicles, the procedure and cost of customs clearance will remain the same as now. The environmental standard also remains unchanged — not lower than "Euro-2", that is, from 1996.

What will be the formula for calculating customs payments?

The Cabinet of Ministers proposes a transition period of 5 years, during which the cost of customs clearance will gradually decrease for cars under 10 years old.

The payments offered by the new system are:

  • Duty = 0
  • VAT = Rate * 3.5 * 20%
  • Excise duty = Rate/2

The basis for calculating taxes is the rate calculated according to the following formula:

RATE = Age factor * engine volume in cubic meters. see * Engine Type Factor * Exclusivity Factor

The age factor will decrease over 5 years.

In the first year of operation, the following age coefficients are offered:

  • 0 years — 2.2; 1 year — 1.9; 2 years — 1.65; 3 years — 1.55; 4 years — 1.45; 5 years — 1.35; 6 years — 1; 7 years — 0.9; 8 years — 0.85; 9 years old — 0.8; 10 years — 0.75; 11 years old — 0.7; 12 years old — 0.7; 13 years old — 0.7; 14 years old — 0.7; 15 years — 0.7; over 15 years — 0.7.

Already in 2027, these indicators will be:

  • 0 years — 1.54; 1 year — 1.33; 2 years — 1.16; 3 years — 1.09; 4 years — 1.02; 5 years — 0.95; 6 years — 0.7; 7 years — 0.63; 8 years — 0.6; 9 years — 0.56; 10 years — 0.53; 11 years old — 0.7; 12 years old — 0.7; 13 years old — 0.7; 14 years old — 0.7; 15 years — 0.7; over 15 years — 0.7.

The coefficient of the engine type depends on the fuel:

  • Gasoline/gas — 1
  • Diesel — 1.2
  • Hybrid — 0.5
  • Electro — 0

The exclusivity factor will be calculated for cars that are subject to the payment of transport tax. These are cars no more than 5 years old, the average market value of which is more than 375 times the minimum wage. The cost of cars is determined by the Ministry of Economic Development, and publishes a comprehensive list of these models every year by February 1 on the official website.

In addition to such innovations, exemption from customs payments is additionally provided for electric vehicles, not only for passenger cars, but also tractors and trucks. And for all vehicles, it is proposed to cancel the fee to the pension fund during the first registration, which today is 3 to 5% of the cost of the car.

So how much will you have to pay for customs clearance "in a new way"?

It will be most profitable to clear customs for newer cars under 5 years old. So, for new cars, the cost of customs clearance can be 9% of the value (for the Mercedes-Benz G-Class for 248 thousand euros), on the other hand, for an old Volkswagen Passat, you will have to pay as much as 63% of its value.

However, if you compare with the current customs clearance rates, you will have to pay less under the new tax formula. Optional certification and no need to pay for the services of a customs broker can be a pleasant bonus.

What can be the cost of customs clearance in 2023

It happens that between the first and second reading, the deputies make many different amendments, and the document that gets to the floor for re-voting differs significantly from the original version. Therefore, it is not yet known what the final customs clearance rates will be

When can the law be adopted as a whole?

As practice shows, in the case when the decision is debatable — and there are always heated discussions about customs clearance of cars — such a process can take several months, or even years, the Institute of Car Market Research explains. For example, the first statements about customs clearance in Diya were announced almost two years ago. Then there were many discussions, in June the draft law was registered, and only now they reached the discussion in the specialized committee of one of the three required draft laws.

Now everything is in the hands of the Parliament. According to Yaroslav Zheleznyak, voting in the hall can take place already at the beginning of February. However, even if the law is adopted as a whole, the Institute of Auto Market Research says, the Ministry of Digital will need some time to implement the technical part of the service. Therefore, according to the most optimistic forecast, the actual date for the start of the new mechanism is no earlier than the summer of this year, experts say.

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