Mass registration and sale of electric cars without VAT: a gray scheme or ordinary business?

December became the peak month for the import of electric vehicles into Ukraine. Against the backdrop of the end of the preferential VAT regime, the market reacted with a sharp increase in imports and the first registrations of such cars. Some bought to save money, some to earn money. Such anomalous activity in the market attracted the attention of the media. Economic Truth calculated that at least 6 thousand cars from those first registered in December went on sale in January, and assessed this as a probable “scheme” of tax evasion. A detailed analysis by experts from the Institute for Car Market Research shows a somewhat more complex picture, where the key role is played not by hidden deals, but by the peculiarities of the legislation, the structure of the car market, and the banal economics of the process.

The exemption of electric vehicles from VAT until a certain date was explicitly enshrined in the Tax Code. The law did not contain any restrictions on the number of such vehicles, their value, or the purpose of their purchase. Market participants acted within the existing rules, using a time window that was known and public long before its expiration.

It is important to note a fundamental point: if there is no obligation to pay tax, it is impossible to "circumvent" or "steal" it. In this case, there is no question of under-receipt of funds, since such revenues were not included in the tax base. The linear approach, which conditionally multiplies the number of imported cars by a hypothetical 20% VAT, does not take into account the fact that without the benefit such a volume of imports would simply not exist.

Deadline and expected market behavior

The Tax Code explicitly provided for the exemption of electric vehicles from VAT until a specific date. After that date, the exemption ceased to apply. Everyone who planned to import an electric car received a clear signal about the "window of opportunity".

Such behavior is not unique to the Ukrainian market. Similar surges have already been observed during the legalization of cars with foreign registration, during the period of zero customs clearance at the beginning of a full-scale war, as well as in other cases when the legislation set a deadline. The mechanics are always the same: the majority postpones the decision until the last moment, after which a stir forms.

In December, this effect was further amplified by the logistical factor. A significant portion of electric vehicles, especially from the US, were ordered back in the summer, taking into account delivery, repair, and clearance times. In fact, December became a point of concentration of processes that had started several months earlier.

Individuals: purchase, registration and subsequent sale

A significant portion of electric vehicles were purchased by private buyers for their own use. Previously, many people had postponed their purchase due to lack of funds, but the end of the grace period simply became an incentive to make a decision earlier.

Another category is individuals who expected to resell the car after the benefits expire at a profit. The legislation provides for the possibility of selling one car per year without additional taxation, the second — at a reduced rate, and the third and subsequent ones are already subject to a fee of more than 18% of the carʼs cost. These norms have existed for a long time and are common to the entire car market.

Listing a car in an ad does not equal the fact of sale. There is an established practice in the market when owners test demand by setting an inflated price with the expectation that "they will buy it." In any case, buying with the expectation of resale is not prohibited and is not a violation, even if the public perception of this type of activity has still not gotten rid of Soviet stereotypes about "resellers."

Legal entities: where does the tension around VAT arise?

The most questions concern transactions of legal entities. For them, VAT arises not only during customs clearance, but also upon the first sale of a car in Ukraine. It is at this point that the thesis about "fictitious registrations" appears.

The essence of the mechanism is as follows. If a car was imported "for a company" and formally sold to an individual before the end of the grace period, such a legal entity was relieved of its obligation to pay VAT in the future. In this case, it was not even necessary to register the car or obtain license plates — it was enough to conclude a sales contract.

From an accounting and tax perspective, this looks like a classic example of tax optimization — using a legally permitted mechanism to reduce the tax burden. The key question here is not the scheme itself, but whether the specific transaction had real economic substance.

Fictitiousness can be proven only by a combination of signs: lack of real transfer of funds, non-market price, relationship of the parties, lack of actual possession or use. Without this, any generalizations remain assumptions. There is no automatic mechanism in current Ukrainian law that would allow recognizing such transactions as fictitious solely on the basis of their mass nature.

6 thousand ads: what does this number really show?

The figure of about 6,000 electric vehicles that immediately appeared in ads after December registrations is not abnormal. The total volume of electric vehicle registrations in December is estimated at about 33,000 units, i.e. approximately 20% of the total volume.

Typically, in Ukraine, there are 10 to 15 thousand ads for the sale of electric cars in rotation at the same time. Some of them are duplicated on different platforms, and some disappear without an actual sale.

In addition, the market faced a glut effect. Mass imports led to the fact that the supply significantly exceeded the effective demand. As a result, many sellers were unable to sell cars at the expected prices. In some segments, the import of an electric car, including VAT, in 2025 has already equaled or even become cheaper than the “preferential” cars imported in December. For some participants, this was a freezing of capital, not a profit.

Most dealers work as intermediaries for the money of their clients. They do not finance the purchase of cars with their own capital, but receive payment for specific stages — auction, logistics, registration. To import even 10 electric cars with an average cost of about $ 17 thousand, working capital of hundreds of thousands of dollars is needed. For companies that earn a few hundred dollars from one car, this is almost unrealistic.

Imports and currency: what did the economy gain?

One of the key arguments in the criticism of the December import of electric cars was the thesis of a “massive outflow of currency”, which allegedly put pressure on the hryvnia exchange rate at the end of the year. However, electric cars are not a unique category of imports. Every year, Ukraine imports coffee, electronics, clothing, medicines, appliances and thousands of other goods that are not domestically produced. In none of these cases is the import treated as a “withdrawal of funds without results”, since in exchange the country receives goods and consumer value. The situation with electric cars is identical.

In the absence of its own automotive industry, Ukraine imports cars anyway, regardless of the type of engine. The key difference lies in further operation. Electric cars consume electricity, a significant part of which is produced domestically. This reduces the need for fuel imports and changes the cost structure in the long term. The funds that would otherwise be spent on importing gasoline or diesel remain within the national economy.

Economic clusters formed around electric vehicles

During the spread of electric vehicles in Ukraine, related areas of activity have been formed that are not limited to one-time imports. A charging infrastructure has developed, created by private business in response to demand. Specialized service stations have appeared that work specifically with electric vehicles, as well as dealerships focused on the import and maintenance of electric vehicles.

A wide range of related services operate around this segment: charging, repair and maintenance, car washes, tires, insurance. All these processes take place within the country, create jobs and form internal cash flow. Importantly, all this was created without direct state support and expenditures from the state budget.

In addition, electric cars are on average newer and better equipped with safety systems, which affects the overall traffic situation.

Instead of a summary

The discussion of the December wave of electric vehicle imports is in itself a normal phenomenon for a market that is going through stages of transformation. Mass reactions to legislative deadlines arise not because of the "cunning" of participants, but because the rules create incentives that businesses and consumers use quite predictably.

At the same time, this situation clearly shows that even formally correct regulations can create side effects. When tax changes are introduced abruptly and without transitional mechanisms, the market concentrates activity in a short period of time. This creates excitement, overloading of infrastructure, speculative expectations and, ultimately, grounds for public debate.

That is why the key conclusion of this story lies not in the plane of assessments of individual actions, but in the plane of the quality of regulatory decisions. When adopting tax or customs changes, it is important to consider not only the fiscal effect, but also the behavioral reaction of the market, import logistics, sales structure and real business processes. Taking these factors into account at the decision-making stage allows to reduce such distortions — without limiting the market, without losing trust and without the need to explain the consequences every time after they have occurred.