The council proposes a 18% tax on quick resale of cars.
The Verkhovna Rada has prepared a revised draft law on new rules for taxing the sale of vehicles. If a vehicle has been in the owner's possession for more than 183 days, the first sale per year is proposed to be subject to a zero tax rate, the second — at 5%; sales before this date, as well as subsequent sales — at 18%. The regulations are to come into effect on January 1 2027 after the law is passed by parliament.
The Verkhovna Rada has prepared a revised draft law that introduces new rules for taxing transactions involving vehicles. The key change concerns the ownership period of the vehicle.
If the vehicle was owned by the seller for more than 183 days since its registration under this person, a zero rate is proposed for the first sale of a car, motorcycle, or scooter within one year. For the second sale, the 5% rate can still be applied if the vehicle was owned for more than 183 days.
When selling a vehicle before this date, the seller is offered to pay taxes at a rate of 18%: this applies even to the first or second sale of the vehicle within the year. For the third and subsequent sales, the rate of 18% remains in effect.
If the bill is passed, the new rules are scheduled to take effect on January 1 2027. Currently, the proposed regulations are not yet in effect – the document still needs to go through parliamentary review.
The document includes a number of changes for businesses and VAT payers. Specifically, the threshold for a negative VAT value, which could be grounds for a documentary unscheduled audit, is proposed to be increased from 100 thousand to 1 million hryvnias. Sole proprietors – VAT payers – are to be allowed to choose between a monthly and quarterly reporting period: switching to quarterly reporting can be done by submitting a statement no later than 15 calendar days before the start of the corresponding quarter, and changing the chosen period is not allowed more often than once per year. It also provides for automatic pre-filling of tax returns and invoices based on information already available in tax systems, and requires the inclusion of VIN codes on tax invoices for transactions involving vehicles.
The draft law was developed with consideration for Ukraine's obligations to the IMF and the European Union; its provisions are intended to simplify the administration of VAT and change certain rules regarding tax audits.