Excise tax on cigarettes: 1.1 coefficient is applied to the minimum excise tax liability from April 1, 2025
Cigarette manufacturers and importers apply the 1.1 coefficient to the minimum excise tax liability from April 1 to December 31, 2025.
According to the declaration results by the excise tax payers for 2024, share of the total amount of excise tax liabilities in weighted average retail price of cigarettes is 55.8 percent, i.e. less than 60%.
According to requirements of the Tax Code of Ukraine, information has been published on the State Tax Service’s web portal regarding:
- total excise tax liabilities on cigarettes;
- weighted average retail sales price of cigarettes;
- indicator (in percentage) characterizing share of the total amount of excise tax liabilities in weighted average retail sales price of cigarettes.
Calculation of indicators was carried out based on data of the excise tax declarations of all cigarette manufacturers and importers for January – December 2024.
What excise tax payers and which products are subject to the 1.1 coefficient?
To all manufacturers and importers of tobacco products under codes according to Ukrainian classification of the foreign economic activity products 2402 20 90 10 (cigarettes without filter) and 2402 20 90 20 (cigarettes with filter).
During what periods and under what circumstances does the 1.1 coefficient apply?
- in the process of calculating excise tax payable (taking into account the minimum excise tax liability) for marks received in a period from April 1 to December 31, 2025 of the current year (Clause 2 of Sub-paragraph 222.1.2 Paragraph 222.1 Article 222 of the Code);
and
- in the process of determining tax liability in the excise tax declarations for the reporting periods April – December 2025.
How will application of the 1.1coefficient to amount of the minimum excise tax liability be reflected in the tax reporting for 2025?
Column 17 “Minimum tax liability set by the Code (UAH) per 1000 units” of Annex 2 to the Excise tax declaration for the reporting periods April – December 2025 indicates the minimum excise tax liability increased by the 1.1 coefficient.
For reference:
Sub-paragraph 14.1.602 Paragraph 14.1 Article 14 and Paragraph 221.6 Article 221 of the Tax Code of Ukraine are with changes made by the Laws of Ukraine № 2245-VIII as of 07.12.2017 and № 3878-IХ as of 18.07.2024.
