Law allowing affordable clearance of cars running on foreign plates passes first reading

The Verkhovna Rada, Ukraine's Parliament, has passed at first reading amendments to tax legislation allowing affordable one-time customs clearance of vehicles running with foreign registration plates.

Clearance will cost motorists up to EUR 1,000.

The preferential excise tax will be valid for 180 days from the day the law enters into force.

The base for the value-added tax (VAT) will be limited to the excise tax.

The tax amount will be determined at a rate depending on the age of the vehicle, engine size, and type of fuel.

Read alsoOwners of cars with foreign registration plates rallying outside parliament (Photo)At the same time, owners of such cars have been rallying outside the Rada, demanding that an alternative bill be adopted, allowing clearance without penalties, but subject to the payment of customs duties and a UAH 8,500 contribution to the state budget.

Cars with foreign registration plates in Ukraine: Background

From February 23, 2019, there was a general regime of customs clearance of cars with foreign registration in Ukraine at a full rate of excise tax. It was assumed that car owners from May 24 would start pay fines to end the use of such cars in Ukraine. However, the Verkhovna Rada, Ukraine's parliament, postponed their introduction until August 22.

On September 12, 2019, the Verkhovna Rada passed a bill postponing the application of penalties for violating the procedure for importing vehicles with foreign registration into Ukraine's customs territory for another three months.

Ukrainian President Volodymyr Zelensky signed the bill into law on September 20, 2019.

Read alsoSales of new passenger cars in Ukraine 19% down in JanIn October 2019, a draft law on customs clearance of cars with foreign registration plates under the new formula was registered in parliament.

On October 2, 2019, the Cabinet of Ministers postponed the introduction of fines for owners of cars with foreign registration that failed to get customs clearance until January 1, 2020.

On October 29, 2020, it became known that the Cabinet had allowed to fine drivers of cars with foreign registration plates.

In January 2021, the Verkhovna Rada published two bills to amend the Tax and Customs Codes (Nos. 4643-d and 4644-d dated January 25, 2021).

On February 4, 2021, the Ministry of Internal Affairs promised to temporarily not fine drivers of cars with foreign registration.