What are the object, taxation basis and date of excise tax liability for retail sale of tobacco products, tobacco and industrial tobacco substitutes and liquids used in electronic cigarettes for producers and importers of such goods?

Sub-paragraph 212.1.17 Paragraph 212.1 of the Tax Code of Ukraine as of 02.12.2010 № 2755-VI with changes and amendments (hereinafter – TCU) stipulates that the excise tax payer is an individual – producer and / or importer of tobacco products, tobacco and industrial substitutes for tobacco, liquids used in electronic cigarettes (hereinafter – producers / importers), who carries out their sale for purposes of the excise taxation of the retail sale of excisable goods by retail trade entities at rate determined in Sub-paragraph 215.3.10 Paragraph 215.3 Article 215 of the TCU.

Excise taxation object is sales operations conducted by producers and / or importers, including the retail sale of tobacco products, tobacco and industrial tobacco substitutes, liquids used in electronic cigarettes for excise taxation purposes for the sale of excisable goods by retail trade entities (Sub-paragraph 213.1.14 Paragraph 213.1 Article 213 of the TCU).

Excise taxation base is the cost at the maximum retail prices of tobacco products, tobacco and industrial tobacco substitutes, liquids used in electronic cigarettes, including the value added tax and excise tax that are sold according to Sub-paragraph 213.1.14 Paragraph 213.1 Article 213 of the TCU (Sub-paragraph 214.1.5 Paragraph 214.1 Article 214 of the TCU).

Maximum retail prices are prices set for excisable goods (products including all types of taxes (levies). Excise tax on excisable goods sold by retail trade entities is not included in the maximum retail price.

Maximum retail prices for excisable goods (products) are set for tobacco products, tobacco, industrial tobacco substitutes and liquids used in electronic cigarettes by producers or importers of goods (products) declaring such prices in manner prescribed by the TCU. Sale of excisable goods by retail trade entities to which the maximum retail prices is set may not be carried out at prices higher than the maximum retail prices, increased by amount of excise tax on retail sale of excisable goods (Sub-paragraph 14.1.106 Paragraph 14.1 Article 14 of the TCU).

Date of occurrence of tax liabilities for the sale of tobacco products, tobacco and industrial tobacco substitutes, liquids used in electronic cigarettes, according to Sub-paragraph 213.1.14 Paragraph 213.1 Article 213 of the TCU, is the date of sale by producers and / or importers of tobacco products, tobacco and industrial tobacco substitutes, liquids used in electronic cigarettes in the retail sale or economic entities involved in the wholesale and / or retail sale of such products (Paragraph 216.14 Article 216 of the TCU).

Therefore, for purposes of the excise taxation on the sale of excisable goods by retail trade entities, for producers / importers:

taxation object is sales operations, including the retail sales of tobacco products, tobacco and industrial tobacco substitutes, liquids used in electronic cigarettes;

excise taxation base is the cost at the maximum retail prices of tobacco products, tobacco and industrial tobacco substitutes, liquids used in electronic cigarettes, including the value added tax and excise tax which does not include excise tax on excisable goods sold by the retail trade entities;

date of occurrence of tax liabilities is the date of sale of tobacco products, tobacco and industrial substitutes for tobacco, liquids used in electronic cigarettes in the retail sale or by economic entities involved in the wholesale and / or retail sale of such products.

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