LETTER OF THE STATE CUSTOMS SERVICE OF UKRAINE

of November 19, 2012 No. 11.1/2-25/13003-EP

About the order vehicles

On accomplishment of Item 5 of the decision of board of State Customs Service of Ukraine enacted by the order of 01.09.2012 No. 452, for the purpose of settlement of the order by vehicles which carry over the state, and activation of work of customs authorities concerning release of warehouses from remaining balance of such property, report about the following.

According to part nine of Article 243 of the Customs code of Ukraine goods and vehicles shall be implemented at the prices determined according to the legislation of Ukraine on assessment of property, property rights and professional estimative activity and the Tax code of Ukraine.

The tax code of Ukraine governs the relations which arise in the field of collection of taxes and charges, in particular, determines the exhaustive list of taxes and fees which are levied in Ukraine, and procedure for their administration. At the same time, rules of the taxation of goods which move through customs border of Ukraine are determined by the Tax code of Ukraine, except rules of the taxation of goods duty which are established by the Customs code of Ukraine and other laws concerning customs affairs.

According to article 9 of the Law of Ukraine "About assessment of property, property rights and professional estimative activity in Ukraine" methodical regulation of assessment of property is performed in the corresponding regulatory legal acts according to property: provisions (national standards) of property assessment which affirm the Cabinet of Ministers of Ukraine, techniques and other regulatory legal acts which are developed taking into account requirements of provisions (national standards) and affirm the Cabinet of Ministers of Ukraine or Fund of state-owned property of Ukraine.

The technique of merchandising examination and assessment of the wheel vehicles (WV), is approved by the order of the Ministry of Justice of Ukraine and Fund of state-owned property of Ukraine of 24.11.2003 No. 142/5/2092 (with changes). According to the Section VII "Cost determination of KTS" of this Technique, the main approach which is used for KTS assessment comparative approach is. According to it cost determination of KTS in the territory of Ukraine is carried out based on the prices of their sale and current prices of the offer to sale which are specified in domestic reference books. Use of foreign reference books is allowed in case of lack of the necessary information in domestic reference books. At the same time, the cost equivalent of the amount of taxes, charges, other obligatory payments during customs clearance is not considered in case of acceptance of the price of KTS from domestic reference books or at the prices of dealers of the manufacturing plants of Ukraine.

Thus, in case of determination of market value of vehicles which is created by the expert by means of domestic reference books or at the prices of dealers of the manufacturing plants of Ukraine the amounts of customs payments shall be considered in such cost, but not to be in addition added. At present at the initiative of State Customs Service the Ministry of Finance the draft of the resolution of the Cabinet of Ministers of Ukraine which is in determination of the separate procedure of registration of results of assessment of goods and vehicles that are withdrawn or accepted on storage by customs authorities prepares for submitting for examination of the Government and the states which will contain among other things the mechanism of taking into account of the size of customs payments in market value carry over.

For the purpose of creation of equal market conditions for all goods which get on the market, ensuring payment of the corresponding taxes in case of return in accordance with the established procedure of means from realization of vehicles to their owners, and also payment confirmation of customs payments in case of state registration of vehicles in bodies of the Ministry of Internal Affairs, accounting of market value of vehicles is performed taking into account customs payments.

That is, for accounting of duty amounts and the VAT which are determined as a percentage these amounts need to be allocated from the market value of vehicles determined by the expert. The amount of the excise tax will be determined in the fixed units depending on year of release of the vehicle, amount and type of the engine.

On condition of the corresponding accounting, requirements of the current legislation of Ukraine about assessment of property, property rights and professional estimative activity and the Tax code of Ukraine will be observed. Similar accounting of the size of customs payments if necessary shall be used also for other property categories which carries over the state.

It should be noted that in case of determination of market value of vehicles taking into account the given procedure and provision to customs by the body of GIS or the buyer of the documents confirming payment, will provide state registration of such vehicles in bodies of the Ministry of Internal Affairs (according to the paragraph the sixth Item 11 of the Procedure for state registration (re-registration), removal from accounting of cars, buses, and also self-propelled machines designed on the chassis of cars, motorcycles of all types, brands and models, trail cars, semitrailer trucks, microcars, other vehicles and mopeds, the Cabinet of Ministers of Ukraine approved by the resolution equated to them of 07.09.1998 No. 1388 (with changes), state registration of the vehicles imported on customs area of Ukraine without tax payment and charges (obligatory payments) which are stipulated by the legislation during import of such means it is carried out on condition of submission of documents on introduction of such taxes and fees (obligatory payments).

We note that because of features of accounting of the excise tax, certain amounts of the vehicles turned into advantage of the state will not manage to be realized because of excess of the amount of the excise tax over their real market value. We predict that the vast majority of such vehicles will constitute cars age over 5 years and the large volume of the engine (state policy is directed to prevention of hit on the territory of Ukraine of the vehicles which were in use and such that excessively pollute the environment).

The procedure for the order the vehicles which are not realized in accordance with the established procedure provides possibility of their free transfer, dekitting/utilization. At the same time, the decision concerning election of the corresponding procedure shall be adopted by the relevant commission on the order property which carries over the state, taking into account the available addresses of rather free receipt of property or economic feasibility of dekitting with further realization of suitable spare parts and aggregates.

Let's notice that transactions on free transfer of excise goods (in particular cars) are not exempted by the Tax code of Ukraine from the taxation, and therefore such transfer shall be performed only after payment of the customs payments calculated by the above-stated method.

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