To settle the situation resulting from the violation of the customs regulations due to the use of vehicles with foreign number plates in Ukraine, the Parliament has adopted the draft law No. 8487 “On Amendments to the Tax Code of Ukraine Concerning the Excise Tax on Cars” and the draft law No. 8488 “On Amendments to the Customs Code of Ukraine and Some Other Legislative Acts of Ukraine on the Import of Vehicles to Ukraine”.
What is the problem?
The movement of vehicles with foreign number plates across the customs border of Ukraine and their stay in Ukraine can be considered as a significant security issue which urgently needs to be settled.
Making use of gaps in the regulations separating the areas of responsibility of the SFS and the National Police concerning the control of the use of vehicles with foreign number plates in Ukraine, citizens continue to import vehicles registered in the EU declared for transit and temporary use in Ukraine. Doing so, they do not pay any taxes. Individuals pursuing this kind of tax evasion create a significant workload for the infrastructure of the border control points.
The uncontrolled use of numerous vehicles with foreign number plates results in the higher number of traffic violations and traffic accidents where it is impossible to identify the driver of the respective vehicle. Also, a number of crimes is growing where vehicles with foreign number plates are used.
The SFS estimates that approximately 640,000 vehicles with foreign number plates are now located in Ukraine which were declared for temporary use and transit and are now used by the residents of Ukraine.
Content of the draft laws:
To settle this issue, it is proposed to:
1) implement a new model of the excise tax on cars;
2) close gaps in the legislation on the temporary import of vehicles by citizens and the transit of vehicles used by citizens;
3) implement automated data exchange between the fiscal authorities, the State Border Service and the National Police aiming to establish control over the use of vehicles in Ukraine which were imported to Ukraine in the temporary import or transit mode for private use;
4) establish a new type of liability for the transfer of vehicles for private use imported to Ukraine in the temporary import or transit mode into the property, use or disposal of individuals who did not import these vehicles to Ukraine and did not declare them in the transit mode as well as for the use of such vehicles for business activities and/or for the generation of revenues in Ukraine;
5) increase fines for the violation of the timelines for the transit and temporary import of vehicles for private use;
6) allow the issue of protocols on the violation of the customs rules in the absence of the liable person. Such a protocol shall be sent to the liable person using the address advised by this person or the address available at the fiscal authorities (place of residence or actual place of stay);
7) review the types of administrative fines for traffic violations as well as the rights and duties of drivers and the National Police officers.
What’s the benefit?
The above-mentioned draft laws will:
• reduce taxes for all citizens importing vehicles;
• strengthen the liability for the unauthorized use of vehicles with foreign number plates by the residents of Ukraine;
• modify the rules for the import of vehicles by the citizens of Ukraine;
• stipulate that the regulations easing the terms for the import of vehicles (abolition of the requirements concerning conformity with environmental standards) enter into force on the day of their publication, whereas the regulations enhancing the liability of drivers (fines) enter into force in 180 days after the publication.
This comprehensive legislative approach combined with the joint efforts of the customs, border police and the National Police will make it possible to properly regulate the import of vehicles with foreign number plates to Ukraine while respecting the interests of the state budget and all citizens of Ukraine. It will also ensure effective control over the movement and proper use of such vehicles as well as will strengthen the liability of citizens for the violation of the customs rules.
The key point stipulated in the draft law No. 8487 is that the revenues received from the customs clearance of vehicles imported in Ukraine and declared in the transit or temporary import mode starting from January 1, 2015 and up to the day when this Law entered into force shall be used to pay pensions to the entitled citizens of Ukraine.