Ucraina

This web site aims to provide some useful legal information for those persons who are willing to enter into any kind of relationship with the Republic of Ukraine – by focusing on some aspects related to international law and to domestic commercial law.
Therefore, this web site is not intended to exhaustively describe international law or domestic commercial law, but simply to focus the attention on the most interesting and practical aspects for those persons who are willing to enter into a business relationship with the Country.
This web site has no political content: it is free and open to all persons who intend to give a contribution in the field of civil, commercial and administrative law. For any information, clarification or advice, please contact us at: mail@decapoa.com

Ucraina

About Ukraine

Ukraine is a Country of Eastern Europe with about 46 million inhabitants. It is a post-soviet Country, which became independent in 1991. Despite the continuous crisis in the economic and politic sectors, Ukraine keeps strengthening its position on the world market year after year, especially on the European market. The Association Agreement between the European Union and Ukraine is an international treaty which aims at promoting integration between the European Union and Ukraine in the fields of politics, trade, culture and security. All the parties to the Agreement finished ratifying it on 11th July 2017, which is a starting point to strengthen mutual relationships between the countries. For the purpose of European integration, Ukraine introduces reforms in the economic and political sectors as well as in the legal sector. In particular, in the last 3 years, Ukrainian government introduced some amendments to the legislative framework as far as the respect of European Union legislative rules concerns. Nonetheless, Ukrainian legislation remains different from the European one. At present, thanks to this Agreement, Ukrainian companies have the opportunity to enter the European market more easily. However, some difficulties persist in the legal framework and in drafting all the necessary documents, difficulties that our firm can solve.

Import taxes towards Ukraine

Import and export operations in Ukraine are subject to different taxes such as customs duty and VAT. In some cases, special excise duties may be applied or other payments related to the issuance of licenses and to endorsement of products’ labels may be required. Customs duties and the items on which they are applied are only changed in accordance with the decisions of the Ukrainian Parliament.
UCFEA (Ukrainian Classification of Foreign Economic Activities) is based on Harmonized Commodity Description and Coding System (1996) and on EC Combined Nomenclature (2000) and it is the customs classification system currently in use.
The UCFEA is the basis on which the Country’s customs duties are to be calculated.
Import duties are calculated according to the Ukraine’s Unified Customs Tariffs on the basis of the Harmonized System and are expressed in percentage of the goods’ customs value per single unit (of good or product) or per a certain number of units. Special customs duties such as special, compensatory, anti-dumping and seasonal import and export taxes are in force for certain types of goods and classes of goods. Customs duties must be paid in the Ukrainian currency, the Hryvnia.
VAT is 20%, calculated on the value of the exiting goods i.e. the CIF value plus customs and excise duties. VAT must be paid when customs duties and other taxes are paid at a rate established according to the goods’ customs value. In addition to VAT and to customs duties, in compliance with the Unified Customs Tariffs there is a further tax on the goods’ customs value. In 2017 such additional tax was lowered from 0,2% to 0,15% and cannot exceed 1.000 USD. A further excise applies on luxury goods imported to Ukraine such as precious metals, alcoholic beverages and tobacco. Importers, especially those dealing with luxury goods, have to always be aware of the new rules governing such particular products. In general, the documents required at customs are the certificates of origin of the products or machinery and the commercial invoice.
Import duties are partially or wholly applied according to the country of origin of the goods. A lighter regime is especially granted to those countries or groups of countries which are more involved as commercial partners in Ukraine.
According to Article VII of the Law of Ukraine on Foreign Economic Activity, the framework of tariffs in Ukraine includes three types of import duties according to the country of origin of the goods:

  • Full- higher than MFN (Most Favored Nation) rate, for the goods coming from countries which do not benefit from special tax breaks;
  • Most Favored Nation (MFN), for the goods coming from countries which benefit from such treatment, from 2 to 10 times lower than the full ones;
  • Preferential – which applies to importations from the countries which have signed a Free-Trade Agreement or other trade agreements with Ukraine, such as the CIS countries (Armenia, Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Tajikistan, Turkmenistan and Uzbekistan), even lower than MFN rates.
After becoming a member of the World Trade Organization in 2008, Ukraine applied a new and reduced MFN rates on all goods coming from WTO member countries. Despite being part of the WTO, Italy enjoys a facilitated regime as Most Favored Nation, it being one of the most active countries as commercial partners to Ukraine. The value, for customs purposes, in accordance with Article 259 of the Ukrainian Customs Code is defined as the value indicated by the declarant ( this is usually the one shown of the purchase invoice, so-called “transaction value”) or determined by customs based on alternative criteria or by the transaction value. The Ukrainian customs tariff includes more than 11.000 items, most of which are subject to ad valorem duties, while a minimum percentage ( around 6%) is affected by specific or mixed duties. The latter, in particular, apply to all agricultural products imported, especially those that compete with goods produced within the country. To give an example a duty of 30% is applied on sunflower oil whereas a duty of 50% is applied on sugar. This percentage is higher than the average of 11.5% of the customs duties applied on agricultural products. With regards to industrial products, the average tax rate is 4.91% and, therefore, also for electrical/electronic material the value should be the same except in cases where the application of preferential regimes is to be verified in relation to the specific type of goods and their provenance.

Duties for imports from Ukraine to the European Union

The customs duty applied by the European Union varies according to the type of imported good and is calculated on the basis of its value in the seller's declaration which usually corresponds to the invoice sent with the product. If a check is made and the Customs’ employee detects a mismatch between the amount paid and the value of the goods, this will be reassessed and the duty will be calculated on the new valuation. This procedure is at the discretion of the customs officer, based on presumed assessments. The choice of packages to be assessed happens randomly. In any case, the customs tax is calculated on the value of the goods including shipping costs. If these are not indicated, it will be calculated based on a presumed value. In shipments to the European Union, the duty applied corresponds to the Integrated Community Rate (TARIC). The TARIC is calculated as a percentage according to the product tables introduced by Reg. (CEE) n. 2658/87 to the first customs of entry into the Union. Unfortunately, in order to calculate TARIC, you need the specific commodity code for the asset that you intend to import. Otherwise, it is not possible to calculate precisely the duties given the multiplicity of the items and the different qualifications of use. To give a trivial example, the import of a dishwasher for family use is subject to a duty of 2.7%, while if it is imported for other uses it is subject to a duty of 1.7%. If the merchandise code is not available, it would be useful to have a minimum description of the good or the use that one intends to make of it.

Disclaimer

Please note the following:
This web site and the information contained hereto have been developed and provided by de Capoa Law Firm for informational purposes only.
This web site is not intended to be, and is not a substitute for, legal advice. Please do not rely on any information in these pages as a source of legal advice.
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This web site is not intended to be advertising. De Capoa Law Firm does not wish to represent anyone seeking representation based upon a review of this web site in any place where it does not comply with all laws and ethical rules.
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