Are business entities that have license for the retail sale of tobacco products obliged to submit the excise tax declaration, including for periods of April – December 2022?

Taxpayer is obliged for each reporting period established by the Tax Code of Ukraine № 2755-VI, as of 02.12.2010 with changes and amendments (hereinafter – TCU) in which taxation objects arise or in case of indicators that are subject to declaration, according to requirements of the TCU to submit tax declarations for each individual tax of which he / she is a payer. This Paragraph applies to all taxpayers, including taxpayers who are on the simplified taxation system of accounting and reporting (Paragraph 49.2 Article 49 of the TCU).

At the same time, payers defined in Sub-paragraph 212.1.15 Paragraph 212.1 Article 212 of the TCU, as well as payers who have valid (including suspended) licenses to carry out activities with excise products that are subject to licensing according to the law, are obliged for each established by this Code reporting period to submit tax declarations, regardless of whether such taxpayers conducted economic activity in the reporting period (Paragraph 49.2 Note 1 Article 49 of the TCU).

From 01.05.2022, provisions of the Law of Ukraine 21 № 1914-IX as of 30.11.2021 "On amendments to the Tax Code of Ukraine and other legislative acts of Ukraine on ensuring balance of budget revenues" regarding the transfer to producers and importers of obligation to pay (5%) excise tax on the sale by retail business entities of tobacco products, tobacco and industrial tobacco substitutes, liquids used in electronic cigarettes.

Paragraph 40 Sub-section 5 Section XX "Transitional Provisions" of the TCU stipulates that temporarily, until 01.01.2023, payment of excise tax on the sale by retail business entities of excise goods (tobacco products, tobacco and industrial tobacco substitutes) produced before 01.04.2022 of the year, including by foreign manufacturers and not sold to final consumers by 01.04.2022, is carried out in order and under conditions that were in effect until 01.04.2022.

Paragraph 212.1 Article 212 of the TCU valid until 01.05.2022 stipulates that excise tax payer is, in particular, a person – retail business entity that sells excise goods (except for tobacco products, tobacco and industrial tobacco substitutes, liquids used in electronic cigarettes).

Taking into account above specified, excise tax on the sale by retail business entities:

from tobacco products, tobacco and industrial tobacco substitutes produced from 01.04.2022, liquids used in electronic cigarettes produced from 01.01.2022 paid by manufacturers and importers upon their sale starting from 01.05.2022 of tobacco products, tobacco and industrial tobacco substitutes produced before 01.04.2022, including by foreign manufacturers and not sold to final consumers until 01.04.2022, temporarily, until 01.01.2023, carried out in order and under conditions that were in effect until 01.04.2022 and paid by retail business entities from volumes of sold excise goods. At the same time, the last reporting period for which the tax is paid is December 2022.

Excise tax declaration form (hereinafter – Declaration), Procedure for its completion and submission was approved by Order of the Ministry of Finance of Ukraine № 14 as of 01.23.2015 with changes and amendments (hereinafter – Order № 14).

According to requirements of Order № 14, calculation of excise tax on operations involving the retail sale of excisable goods by business entities is carried out in Annex 6 "Calculation of the excise tax amount on the sale of excisable goods by retail business entities" (hereinafter – retail 6) to the Declaration.

Filling in Annex 6 to the Declaration retail business entities must adhere to the definition of tax base – only value of sold tobacco products, tobacco and industrial tobacco substitutes produced before 01.04.2022.

It should be noted that temporarily, for a period until termination or abolition of the martial law on the territory of Ukraine, introduced by Decree of the President of Ukraine № 64/2022 as of 24.02.2022 "On introduction of the martial law in Ukraine", approved by the Law of Ukraine № 2102-IX as of 24.02.2022 "On approval of Decree of the President of Ukraine "On introduction of the martial law in Ukraine", payment of taxes and levies is carried out taking into account specifics according to Paragraph 69 Sub-section 10 Section XX "Transitional provisions" of the TCU.

Therefore, business entity that has license for the retail sale of tobacco products, in manner and under conditions that were in effect until 01.05.2022 is required to submit excise tax declaration for 5% taxation on the retail sale of excise goods for reporting monthly periods:

until April 2022 inclusively – from the entire volume of sold tobacco products, tobacco and industrial tobacco substitutes;

May – December 2022 – only for those monthly reporting periods in which the retail seal of tobacco products was carried out, as well as tobacco and industrial tobacco substitutes, which were produced before 01.04.2022, including by foreign manufacturers and were not sold to end consumers before 01.04.2022 of the year from which tax liability should be calculated accordingly.

More information is in the “Knowledge Base” of public information and reference resource