Regarding the Law of Ukraine № 3817-IX as of 18.06.2024 "On state regulation of production and turnover of ethyl alcohol, alcohol distillates, bioethanol, alcoholic beverages, tobacco products, tobacco raw materials, liquids used in ...

Press service of the State Tax Service of Ukraine, published 02 August 2024 at 15:19 Chapter: News

Regarding the Law of Ukraine № 3817-IX as of 18.06.2024 "On state regulation of production and turnover of ethyl alcohol, alcohol distillates, bioethanol, alcoholic beverages, tobacco products, tobacco raw materials, liquids used in electronic cigarettes and fuel"

Law of Ukraine № 3817-IX as of 18.06.2024 "On state regulation of production and turnover of ethyl alcohol, alcohol distillates, bioethanol, alcoholic beverages, tobacco products, tobacco raw materials, liquids used in electronic cigarettes and fuel" entered into force on July 27, 2024 (hereinafter – Law № 3817).

Paragraph 2 Section XII "Final Provisions" of the Law № 3817 establishes that:

Law of Ukraine № 481/95-VR as of 19.12.1995 "On state regulation of production and turnover of ethyl alcohol, alcohol distillates, alcoholic beverages, tobacco products, liquids used in electronic cigarettes and fuel" (hereinafter – Law № 481) expires on January 1, 2025, except for Article 8 of the Law № 481 ("Certification of production of ethyl alcohol, alcohol distillates, bioethanol, alcoholic beverages and tobacco products"), which is valid until the day of entry into force and introduction into effect of Article 33 of the Law № 3817 ("Certification of production of ethyl alcohol, alcohol distillates, bioethanol, alcoholic beverages, tobacco products, liquids used in electronic cigarettes and fermentation of tobacco raw materials");

provisions of the Law № 481 until the day it expires are applied to the extent that they do not contradict provisions of the Law № 3817.  

Paragraph 1 Section XII "Final Provisions" of the Law № 3817 establishes term of entry into force of this Law – from the day following the day of its publication, in addition to its individual provisions, particularly:

Paragraph 85 of Part 1 Article 1, in which to definition of "tobacco products" was added with other nicotine-containing products for oral use, Article 67 "Maximum retail price for tobacco products, tobacco, industrial tobacco substitutes and liquids used in electronic cigarettes" (in part of other of nicotine-containing products for oral use) of the Law № 3187, which enter into force and come into effect from September 1, 2024. Therefore, production of other nicotine-containing products for oral use, whole and retail sales are subject to licensing from September 1, 2024.

Please note that according to Paragraph 21 Section XIII "Transitional Provisions" of the Law № 3817 until October 1, 2024 storage and/or transportation, and/or sale in the customs territory of Ukraine of goods (products) under code 2404 91 90 00 according to Ukrainian classification of the foreign activity product without excise tax stamps is allowed, if such goods (products) were produced in Ukraine or imported to the customs territory of Ukraine before September 1, 2024.

Norms of the Law № 3817, which relate to electronic traceability of turnover of alcoholic beverages, tobacco products and liquids used in electronic cigarettes, excise electronic document, Electronic system of turnover of alcoholic beverages, tobacco products and liquids used in electronic cigarettes, electronic excise stamps, come into force and are in effect from January 1, 2026.

According to Paragraph 1 Section XII "Final Provisions" of the Law № 3817, Section VII "Licensing" of the Law № 3817 enters into force and is put into effect on January 1, 2025 (except for Paragraphs 22, 23, 25 of Part 2 Article 46 "Termination of license for conduction of relevant type of economic activity", which establishes grounds for the licensing authority to make a decision on termination of license for conduction of relevant type of economic activity and Article 49 "Procedure for informing business entities about the cost of licenses for conduction of relevant types of economic activity").

Paragraph 24 Section XIII "Transitional Provisions" of the Law № 3817 stipulates that for a period of the martial law in Ukraine and within 30 days from the date of its termination or cancellation:

business entity’s right to store fuel that is consumed for refueling electric generator installation in the volume of up to 2000 liters at each object equipped with electric generator installation, without obtaining permission documents (permit documents, license for the fuel storage, results of provision of other administrative services) is established;  

fuel storage, which is consumed for refueling electric generator in the amount of more than 2000 liters at each facility equipped with electric generator, is carried out by the business entity on the basis of declaration on conduction of economic activities related to fuel storage, which is submitted free of charge to territorial body of the central executive body authorities implementing state tax policy.

Paragraph 3 Section XIII "Transitional Provisions" of the Law № 3817 stipulates that licenses for conduction of the corresponding type of economic activity, issued according to the Law № 481 until January 1, 2025, are considered valid and confirm right to conduct the corresponding type (types) of economic activity until the end of term for which they were issued (for licenses issued on specified term), or until the day of their termination according to procedure specified by the Law № 3817.

Paragraph 6 Section XIII "Transitional Provisions" of the Law № 3817 regulates actions of the business entities regarding conduction of economic activity starting from the day martial law was introduced in Ukraine and until the day the Law №  3817 enters into force (hereinafter – in a period specified in Paragraph 6).

Specifically, the business entity that, during a period specified in Paragraph 6, carried out economic activity on the basis of license for conduction of relevant type of economic activity, validity period of which expired during this period, and which did not receive new license for conduction of such activity, is obliged:

within three months following the month in which the Law № 3817 came into force, submit application for obtaining new license for conduction of relevant type of economic activity in manner specified by the Law № 481;

to pay unpaid regular payments for license for conduction of relevant type of economic activity, including for a period from the date of expiry of previously issued/granted license – until the last day of third month following the month in which the Law № 3817, or until the day of obtaining new license.

Business entity that, during a period specified in Paragraph 6, carried out economic activity on the basis of license for conduction of relevant type of economic activity, validity period of which did not expire in such period, but for which regular payments have not been paid, is obliged within three months following month in which the Law № 3817 entered into force, to pay unpaid regular payments for license for conduction of relevant type of economic activity during the specified period.

Business entity that, within a period specified in Paragraph 6, has stopped conducting economic activities that are subject to licensing according to the Law № 481, is obliged within two months following the month in which the Law № 3817 entered into force to: 

submit to the licensing body application for termination of license in connection with termination of economic activity subject to licensing;

pay the outstanding payments for license for conduction of relevant type of economic activity that have not been paid for a period up to the day of termination of economic activity subject to licensing.

Paragraph 6 Section XIII "Transitional Provisions" of the Law № 3817 also establishes:

mechanism for calculating amount of unpaid periodic payments that are payable according to this Paragraph;

business entity’s right to apply to the licensing authority for clarification of amount of unpaid regular payments that is due;

consequences for the business entity in case of non-fulfillment of requirement to pay regular payments (recognition of license as invalid from the date of its expiration and recognition as having been carried out without license with application of financial sanctions determined by the Law № 481 – for licenses whose validity period expired in a period specified in Paragraph 6; termination of license according to procedure specified by the Law № 481, from the day of non-payment of the first regular payment – for licenses whose validity period did not expire during the martial law). 

From the date of entry into force of the Law № 3817, liability is applied in amounts established by:

Article 73 of the Law № 3817 for violating provisions of the Law № 3817 and Law № 481, during period of validity of provisions of the Law № 481;

Article 17 of the Law № 481 – in cases established by Paragraph 6 Section XIII "Transitional Provisions" of the Law № 3817.