Novations regarding the excise tax on tobacco products, liquids used in electronic cigarettes are introduced from March 25

Law of Ukraine № 4115-IХ as of 04.12.2024 “On amendments to the Tax Code of Ukraine and other Laws of Ukraine regarding revision of the excise tax rates on tobacco products” (hereinafter – Law № 4115) entered into force on March 25, 2025. It was published in the newspaper “Holos Ukrayiny” on March 25, 2025 under № 58.

The Law made changes to the:

- Tax Code of Ukraine;

- Law of Ukraine № 3817-IX as of 18.06.2024 “On state regulation of production and circulation of ethyl alcohol, alcohol distillates, bioethanol, alcoholic beverages, tobacco products, tobacco raw materials, liquids used in electronic cigarettes and fuel” (hereinafter – Law № 3817).

Main changes to the Tax Code of Ukraine

1. Regulation of the retail price of excisable products:

for setting the maximum retail price for tobacco products;

for the retail sale – the retail price cannot be less than the minimum excise tax liability or the excise tax rate multiplied by 1.45.

2. Introduction of a new term “non-alcoholic beer”:

defined as a foamy beverage with alcohol content of 0.5% vol. or less;

refers to commodity heading 2202 according to Ukrainian classification of the foreign economic activity products.

3. Application peculiarities of the exchange rates:

- for tobacco products, official exchange rate of the National Bank of Ukraine at 00 hours 00 minutes on the first day of a calendar half-year preceding the half-year in which:

purchase of the excise tax marks (until January 1, 2026) is carried out;

formation of a unique identifier (from January 1, 2026);

sale of tobacco products produced in the customs territory of Ukraine or submission of a customs declaration;

accrual of the excise tax obligations on tobacco raw materials and tobacco wastes.

4. Reduction of the total losses and wastes:

reduction from 10% to 5% for production of fermented tobacco raw materials.

5. Excise tax rates on tobacco products, tobacco and produced tobacco substitutes:

is set in units of Euro.

6. Annual increase in the excise tax rates:

starting from the date of entry into force of the Law № 4115 until 31.12.2027, the excise tax rates will be gradually increased.

7. Recalculation of the excise tax rates:

determining amounts of tax paid to the budget by producers and importers.

8. Easing of the anti-forstolling restrictions:

Temporarily, for a period of the martial law, average monthly sales volume of the excise tax marks has been increased to 120% (previously it was 115%) before increase in the excise tax rates.

Main changes to the Law № 3817

1. Expansion of the equipment list:

machines for production of cigarette filters, cigarette cases were added.

2. Introduction of the new fines:

alcohol wholesale at prices lower than the established minimum;

lack of video surveillance at tobacco production enterprises;

retail sale of excisable products at prices lower than the established ones.