Changes in procedure for payment of 5% excise tax on retail sales of tobacco products, tobacco, industrial tobacco substitutes and liquids used in electronic cigarettes

Law of Ukraine as of 30.11.2021 № 1914-IX “On amendments to the Tax Code of Ukraine and other legislative acts of Ukraine to ensure balance of budget revenues” after entry into force of amendments to the Budget Code provides for transfer to producers and importers of 5% excise tax on the sale of tobacco products, tobacco, industrial tobacco substitutes and liquids used in electronic cigarettes, which is currently paid by retail businesses.

Law of Ukraine as of 15.03.2022 № 2134-IX “On amendments to Section VI “Final and Transitional Provisions” of the Budget Code of Ukraine and other legislative acts of Ukraine” changed the date of entry into force of amendments to the Budget Code, which was previously determined by the Law of Ukraine as of 15.02.2022 № 2042-IX “On amendments to the Budget Code of Ukraine”, namely: April 1, 2022 to January 1, 2023 on the implementation of procedure for payment by importers and producers and crediting to local budgets 5% excise tax on retail sales of tobacco products, tobacco, industrial tobacco substitutes and liquids used in electronic cigarettes.

Given above specified, the excise tax on the sale of retail trade entities is paid for:

tobacco products, tobacco, industrial tobacco substitutes and liquids used in electronic cigarettes by producers and importers in their implementation, starting from January 1, 2023;

tobacco products, tobacco and industrial tobacco substitutes, regardless of the production date by retail trade entities from the volumes of these excisable goods sold by January 1, 2023;

REFERENCE:

Given the postponement of the implementation date of amendments to the Budget Code in order to fulfill procedure for crediting 5% of excise tax to local budgets from January 1, 2023, there is a loss of relevance of norms of Paragraph 40 Sub-section 5 Section XX of the Tax Code (amendments were made by the Law of Ukraine as of 15.03.2022 №2139-IX “On amendments to the Tax Code of Ukraine and other legislative acts of Ukraine on the introduction of differentiated rent for natural gas production”), which established that temporarily, until January 1, 2023 the excise payment tax on the sale of excisable goods (tobacco products, tobacco and industrial tobacco substitutes) by retail business entities produced before April 1, 2022, including by foreign producers and not sold to the end users by April 1, 2022, is carried out in the manner and under conditions in force until April 1, 2022.

Accordingly, the excise tax payment on the sale of excisable goods (tobacco products, tobacco and industrial tobacco substitutes) ) by retail business entities, which are sold in 2022 regardless of the date of their production is carried out in the manner and on conditions valid until January 1, 2023.