From which date excise tax on the sale of tobacco products and liquids used in electronic cigarettes by retail trade entities is paid by producers and importers of such goods and by what date is the excise tax paid by retail trade entities? Chapter: News

Law of Ukraine № 2218-IX as of 21.04.2022 “On amendments to the Law of Ukraine “On the state budget of Ukraine for 2022” stipulates that date of entry into force of amendments to the Budget Code of Ukraine as of 08.07.2010 № 2456-VI with changes and amendments (hereinafter – BCU) on the implementation of procedure for crediting to local budgets of 5% excise tax on retail sales of tobacco products, tobacco and industrial tobacco substitutes, liquids used in electronic cigarettes, which is paid by their importers and producers is 01.05.2022.

With introduction of amendments to the Budget Code of Ukraine from 01.05.2022, certain provisions of the Law of Ukraine № 1914-IX as of 30.11.2021 “On amendments to the Tax Code of Ukraine and other legislative acts of Ukraine to ensure balanced budget revenues” are envisaged in terms of transferring to producers and importers the obligation to pay 5% excise tax on the sale by retail trade 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 Tax Code of Ukraine of 02.12.2010 № 2755-VI with changes and amendments stipulates that temporarily until 01.01.2023 payment of excise tax on the sale of excisable goods by retail trade entities (particularly tobacco products, tobacco and industrial tobacco substitutes) produced before 01.04.2022, including foreign producers and not sold to final consumers until 01.04.2022, is carried out in manner and under conditions in force until 01.04.2022.

Given above specified, the excise tax on the sale by retail trade entities is:

paid by producers and importers during their sale starting from 01.05.2022 for tobacco products, tobacco and industrial tobacco substitutes, liquids used in electronic cigarettes;

temporarily until 01.01.2023 for tobacco products, tobacco and industrial tobacco substitutes produced before 01.04.2022, including by foreign producers and not sold to final consumers before 01.04.2022;

carried out in manner and under conditions in force until 01.04.2022and paid by retail trade entities from the volume of sold excisable goods. That is, December 2022 is the last reporting period for which excise tax is paid.

At the same time, a number of draft laws are currently being considered by the Verkhovna Rada of Ukraine, in particular № 7311 as of 24.04.2022, № 7311-d as of 01.05.2022, which stipulate that from tobacco products, tobacco and industrial tobacco substitutes, which are produced before 01.05.2022 instead of the current norm until 01.04.2022, the excise tax on retail sales is paid by retail trade entities.

As follows, if one of the draft laws is adopted, retail trade entities will remain the 5% excise tax payers on the retail sale of tobacco products, tobacco and industrial tobacco substitutes produced before 01.05.2022.

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