Procedure for submitting the excise tax declaration according to the new form for August 2022

Excise tax declarations according to the new form for August 2022 must be submitted not later than September 20 of the current year.

Reminder! Ministry of Justice registered Order of the Ministry of Finance of Ukraine № 151 as of 31.05.2022 "On approval of changes to the excise tax declaration form and Procedure for filling in and submitting excise tax declaration" (hereinafter - Order № 151).

Paragraph 3 of Order № 151 stipulates that it enters into force on the day of its official publication.

On July 22, 2022, Order № 151 was published in the Official Gazette of Ukraine № 56.

Purpose of adoption of Order № 151 is to bring provisions of the excise tax declaration and Procedure for filling in and submitting the excise tax declaration, approved by Order of the Ministry of Finance of Ukraine № 14 as of 23.01.2015, (as amended by Order of the Ministry of Finance of Ukraine № 841 as of 26.09.2016), into line with provisions of the Laws of Ukraine № 1914 as of 30.11.2021-IX "On amendments to the Tax Code of Ukraine and other legislative acts of Ukraine on ensuring balance of budget revenues" (hereinafter - № 1914),  № 2042-IX as of 15.02.2022 "On amendments to the Budget code of Ukraine", №2173-IX as of 01.04.2022 "On amendments to the Tax Code of Ukraine and other legislative acts of Ukraine regarding administration of certain taxes during the martial law, state of emergency" (hereinafter - Law №2173) regarding:

transfer of the 5% excise tax payment on the retail sale of tobacco products to manufacturers and importers of tobacco products, which is paid by the retailer;

improvement, starting in 2022, of mechanism for stopping accumulation of tobacco product residues, tobacco and industrial tobacco substitutes at reduced rates by introducing taxation with application of a factor of 1.5 on the sales volume of tobacco products that exceed the average monthly volume before the tax rate increase;

establishing that spoiled, destroyed goods or goods presence or location of which is not confirmed by the economic entity, including goods shortage of which was discovered as a result of inventory conducted by the retail economic entity are considered to be sold directly to citizens and other end consumers for their personal non-commercial use - for purpose of 5% excise taxation on the retail sales;

introduction in 2022 of the cash method of determining tax liabilities for electricity producers who are assigned with special duties to ensure public interests in accordance with the Law of Ukraine "On the electricity market" and from April 2022 the determination of tax obligations by the cash method has been extended to all electricity producers.

In this regard, the State Tax Service of Ukraine informs.

Clause 2 of Paragraph 46.6 Article 46 of the Tax Code of Ukraine (hereinafter - Code) stipulates that until the determination of new forms of declarations (calculations), which become effective for reporting tax period following the tax period in which they were made public, the declarations forms (calculations) are valid before such determination.

Paragraph 49.2¹ Article 49 of the Code stipulates that payers, defined by Sub-paragraph 212.1.15 Paragraph 212.1 Article 212 of the Code, as well as payers who have valid (including suspended) licenses for a right to carry out activities with excise products that are subject to licensing in accordance with the law, are obliged for each reporting, established by the Code, period to submit tax declarations, regardless of whether such taxpayers conducted economic activity in the reporting period.

Taxpayers, defined by Paragraph 212.1 Article 212 of the Code (except for importers of excise goods specified in Sub-paragraphs 215.3.4, 215.3.5, 215.3.51, 215.3.52, 215.3.6, 215.3.7, 215.3.8 of Paragraph 215.3 Article 215 of the Code ), submit every month not later than the 20th day of the next reporting (tax) period to the controlling body at registration place the excise tax declaration in the form approved in accordance with Procedure established by Article 46 of the Code (Paragraph 223.2 Article 223 of the Code).

That is, the excise tax declaration, according to the new form approved by Order № 151, the taxpayers, defined in Paragraph 223.2 Article 223, taking into account provisions of Paragraph 49.21 f Article 49 of the Code, submit to the controlling body at the registration place for August 2022 not later than September 20 of the current year.

At the same time, the excise tax payers must declare their tax liabilities in this way.

Excise tax on the retail sale of excise goods (tobacco products, tobacco and industrial tobacco substitutes, liquids used in electronic cigarettes)

Since from May 1, 2022, manufacturers and importers are paying 5% of the excise tax on the retail sale of tobacco products, tobacco and industrial tobacco substitutes, which are manufactured from April 1, 2022 and liquids used in electronic cigarettes, which are manufactured from January 1, 2022, then, starting from May 1, 2022, the recommendations should be followed, specified in a letter of the State Tax Service № 4820/7/99-00-21-03-03-07 as of 08.06.2022, which was sent by Main Directorate of the State Tax Service in regions, Kyiv, Interregional Directorate of the State Tax Service for work with large taxpayers and Information and Reference Department of the State Tax Service.

Please note that for August 2022, manufacturers and importers - payers of 5% of the excise tax on the retail sale of tobacco products, tobacco and industrial tobacco substitutes, which have been produced since April 1, 2022 and liquids used in electronic cigarettes, which have been produced since January 1, 2022, submit an approved excise tax declaration to the controlling body at the registration place by order of the MFU № 14 as of 23.01.2015 (as amended by Order №  151) (hereinafter - Declaration) with filling in of Annex 6¹ and Section D strictly following Section IV of the Procedure for filling in the Declaration.

Excise tax on the sale of tobacco products with application of a coefficient of 1.5 in case of exceeding 115% of the average monthly sales volume of tobacco products on the domestic market for previous nine months preceding the three consecutive reporting months preceding the month in which excise tax rates on tobacco products are increased

Excise tax payers on tobacco products, tobacco and industrial tobacco substitutes (including tobacco raw materials, tobacco waste, liquids used in electronic cigarettes) fill in section B of the Declaration "Tax obligations on tobacco products, tobacco and industrial tobacco substitutes (including tobacco raw materials, tobacco waste, liquids used in electronic cigarettes)" and relevant annexes to it.

To calculate the excise tax on the sale of tobacco products, tobacco and industrial tobacco substitutes using a coefficient of 1.5 in case of exceeding 115% of the average monthly sales volume of tobacco products on the domestic market for previous nine months preceding the three consecutive reporting months preceding the month, in which the excise tax rates on tobacco products are increased, Annex 1 "Calculation of the  excise tax amount on excisable goods (products) (except vehicles) for which specific excise tax rates have been set (except for operations specified in Sub-paragraphs 213.1.9, 213.1.11, 213.1.12 of Paragraph 213.1 Article 213 Section VI of the Code )" are filled in, as well as Annex 2 "Calculation of the excise tax amount on tobacco products for which specific and ad valorem excise tax rates are set at the same time" of the Declaration.

Notification! A detailed description of Procedure for filling in Annexes D1 and D2 of the Declaration in the part of determining  of the excise tax obligations in case of exceeding 115% of the average monthly volume of goods (tobacco products, tobacco and industrial tobacco substitutes) sold by the manufacturer / imported by the importer for the previous nine months, which precede three consecutive reporting months preceding the month in which excise tax rates on tobacco products are increased, provided for in Section V of the Procedure for filling in and submitting the excise tax declaration.

The excise tax using a factor of 1.5 coefficient on tobacco products, tobacco and industrial tobacco substitutes is calculated:

for manufacturing enterprises - from the volume of sales on the domestic market in each reporting month (October, November, December 2022), which exceed 115% of the average monthly volume of such sales for January-September 2022;

for importers - from the volume of imports to the customs territory of Ukraine by the importer in each reporting month (October, November, December 2022), which exceed 115% of the average monthly volume of imports by such importer for January-September 2022.

Excise tax on the sale by the retail economic entities of excisable goods, which is paid by the retail economic entities (on alcoholic beverages, tobacco products, tobacco and industrial tobacco substitutes manufactured before April 1, 2022) (section D of the excise tax declaration, annex 6)

Paragraph 40 Sub-section 5 Section XX of the Code stipulates that temporarily, until January 1, 2023, the excise tax payment on the sale by the retail economic entities of excise goods (tobacco products, tobacco and industrial tobacco substitutes), produced before April 1, 2022, including by foreign manufacturers and not sold to end consumers until April 1, 2022, is carried out in order and under conditions that were in effect until April 1, 2022.

Clause 19 of Sub-paragraph 14.1.212 Paragraph 14.1 Article 14 of the Code stipulates that for the excise taxation from the retail sale of excisable goods by economic entities, spoiled, destroyed goods or goods, presence or location of which has not been confirmed by such economic entity, including goods, shortage of which was discovered based on the inventory results conducted by the retail economic entity (including at the request of the controlling body, provided in accordance with Sub-paragraph 20.1.9 Paragraph 20.1 Article 20 of the Code during audit conducted by the controlling body), are considered to be sold directly to citizens and other end consumers for their personal non-commercial use. This norm does not apply to cases provided for in Paragraph 216.3. Article 216 of the Code (goods were lost due to the force majeure and its use in the customs territory of Ukraine is impossible or due to a reason related to a natural result).

Excise tax liabilities on the sale of excisable goods by the retail economic entities in case that the payer discovers losses (shortages), specified in Clause 19 of Sub-paragraph 14.1.212 Paragraph 14.1 Article 14 of the Code, arise for such taxpayer from the date of drawing up relevant document certifying such facts (Paragraph 216.9 Article 216 of the Code).

Calculation of tax liabilities is carried out by the taxpayer in Annex 6 "Calculation of the excise tax amount on the sale of excisable goods by the retail economic entities" to the excise tax declaration.

Drawing up Annex 6 to the excise tax declaration for the reporting period, in which document is drawn up attesting to the fact of spoilage, destruction of goods or failure to confirm presence or location of goods (shortage) for taxation purpose, value of such goods (goods for which a shortage was found) is added to the value of corresponding excise goods sold in the retail trade and public catering network. For example, according to the store inventory results, a shortage of 10 bottles of beer for the amount of 225 UAH was found. According to the inventory results, relevant documents were drawn up in January. Therefore, the indicated shortage of goods (beer) is reflected in declaration, which is prepared by the taxpayer for January. Cost of beer, 2 250 UAH, shortage of which was discovered, is added in Append Annex ix 6 to the cost (with value added tax and without taking into account the excise tax on the sale of excisable goods by the retail economic entities) of excise goods sold in the reporting period in the retail network and in the public catering network (group 3) on line 1.3 "Beer".

Excise tax on electricity (section E of the excise tax declaration, annex 7)

Paragraph 38 Sub-section 5 Section XX of the Code stipulates that for taxpayers, specified in Sub-paragraph 212.1.13 Paragraph 212.1 Article 212 of the Code, who are the electricity producers assigned with special obligations to ensure general public interests in accordance with the Law of Ukraine "On the electric energy market" (hereinafter - electricity producers assigned with special obligations), the date of occurrence of the excise tax liabilities on electricity sale operations is defined as follows:

temporarily from January 1, 2022 to December 31, 2022 inclusively - date of crediting (receiving) funds to the bank account or the date of receiving other types of compensation for sold electricity;

from January 1, 2023 - date of signing the act of acceptance and transfer of electricity in accordance with Paragraph 216.10. Article 216 of the Code (for electricity sold starting from January 1, 2023) and the date of crediting (receiving) funds to the bank account or date of receiving other types of compensation (for electricity sold in a period from January 1, 2022 to December 31, 2022 inclusively).

Annex 1 of the Regulation on the imposition of special duties on participants of the electric energy market to ensure public interests in the process of functioning of the electric energy market, approved by Resolution № 483 of the Cabinet of Ministers of Ukraine  dated 05.06.2019 (as amended by Resolution № 859 of the Cabinet of Ministers of Ukraine dated 11.08.2021) the producers of electric energy, who are entrusted with special duties to ensure interests of the general public in a process of functioning of the electric energy market, include the relevant tax payers.

Such taxpayers, in accordance with the Procedure established Paragraph 49.21. Article 49, Article 223 of the Code, as a part of the excise tax declaration, section E "Tax obligations on the sale of electric energy", submit to the controlling bodies section E "Tax obligations on the sale of electric energy", annex 7 "Calculation of the excise tax amount on the sale of electrical energy" and annex 4 "Turnovers exempt from taxation, taxed at a zero or reduced rate" (according to necessary).

Producers of electric energy, in Annex 7, who are assigned with special obligations, reflect taxable operations in separate lines according to the period of occurrence of tax liabilities:

taxable operations for the sale of electric energy produced by the electric energy producer for which tax obligations arise in accordance with Paragraph 216.10. Article 216 of Section VI of the Code;

taxable operations for the sale of electric energy produced in 2022 by the electric energy producer, in terms of performance of special duties to ensure public interests in the process of functioning of electric energy market, for which tax liabilities arise in accordance with Paragraph 38 Sub-section 5 Section XX of the Code.

In order to ensure completeness of declaration of the excise tax liabilities on the sale of electricity, electricity producers who are assigned with special duties must submit Annex 7 to the excise tax declaration.

Annex 7 to the excise tax declaration contains two sections:

section I must reflect sale of electric energy produced by the electric energy producer, according to which date of tax liability is the date of signing the act of receipt and transfer of electricity (Paragraph 216.10 Article 216 Section VI of the Code);

section II must reflect sale of electric energy produced by the electric energy producer, in terms of performance of special duties to ensure public interests in the process of functioning of the electric energy market, according to which date of occurrence of tax liabilities is the date of crediting (receiving) funds to the bank account or the date of receipt other types of compensation for realized electrical energy. Column 5 of this section indicates amounts of advance payment and other types of compensation received in the reporting periods until January 1, 2022, and for which, on the last day of the corresponding reporting period, an obligation to supply electricity was not fulfilled. 

With entry into force of the Law of Ukraine № 2173-IX on 16.04. 2022 "Cash method", the definition of the excise tax payment liability, except for electricity producers, who are assigned with special duties to ensure interests of the general public in the process of functioning of electricity market, has been extended to all electricity producers.

Namely, provisions of Paragraph 38¹ of Sub-section 5 Section XX of the Code should be taken into account, which temporarily, from March 1, 2022 until termination or cancellation of the state of emergency or martial law on the territory of Ukraine, stipulate that the date of occurrence of the excise tax liabilities on the sale of electric energy is the date crediting (receiving) funds to the bank account or date of receipt of other types of compensation for realized electric energy, taking into account the date of entry into force of the Law of Ukraine № 2173-IXж norm is valid starting from the reporting period of April 2022.

Further, after the expiration of temporary validity of the above specified norms, it is stipulated that for all producers of electric energy:

from the first tax period following the period of termination or cancellation of the martial law or state of emergency on the territory of Ukraine - the date of drawing up document certifying the supply of electric energy in accordance with Paragraph 216.10 of Article 216 of the Code (for electric energy sold starting from the first tax period following by the period of termination or cancellation of the martial law, state of emergency in the territory of Ukraine) and the date of crediting (receiving) funds to the bank account or date of receipt of other types of compensation (for electric energy sold in a period from April 2022 to the last tax period in which the martial law or state of emergency on the territory of Ukraine was suspended or canceled inclusively).

In addition, the date of occurrence of tax liabilities for the supply of electricity has been changed for all electricity producers. This date is the date of drawing up document certifying the supply of electricity, while earlier it was the date of signing the act of receiving and transferring electricity. Such rule will apply even after the end of a period of the martial law and state of emergency.

In view of the date of entry into force of the Law № 2173, in order to ensure completeness of the excise tax liabilities declaration on the sale of electricity, starting from the reporting period of April-July 2022, before entry into force of the new declaration form, producers of electric energy must submit Annex 10 of the excise tax declaration; procedure for filling in is given in Annex 1 to letter of the State Tax Service №209/99-00-21-03-03-07 as of 02.02.2022, posted at the link: "Legislation" - "Taxes, fees, payments" - "State taxes " - "Excise tax" - "Letters").

With entry into force of the new declaration form for the tax period of August 2022, producers of electric energy Annex 7 to the declaration and section E "Tax obligations for the sale of electrical energy" submit to the controlling body at the registration place; procedure for filling in which is described in detail in Annex 1 to letter of the State Tax Service № 209/99-00-21-03-03-07 as of 02.02.2022.

Please note that since the occurrence of the excise tax payment liability on electricity involves simultaneous presence of two cases: crediting (receiving) funds to the bank account or received other types of compensation and realization of electric energy, as an operation in the customs territory of Ukraine, which involves shipment, in this case the release, electric energy – then the tax liability is determined in the reporting period in which the following occurred:

crediting (receiving) funds to the bank account or received other types of compensation and realization - release of electric energy in the previous reporting periods of validity of Paragraph 38¹ of Sub-section 5 Section XX of the Code;

realization - sale of electric energy and crediting (receiving) funds to the bank account or received other types of compensation in previous reporting periods;

simultaneous crediting (receiving) funds to the bank account or received other types of compensation and realization - sale of electric energy.

Excise tax on beer (section A of the excise tax declaration, annex 1)

Amendments to Sub-paragraph 215.3.1 Sub-paragraph 215.3 Article 215 Section VI of the Code stipulates that the excise tax rate on beer changes from 2.78 UAH for 1 liter to 59.82 UAH for 1 liter of 100% alcohol (taking into account the consumer price index for 2020 – 5%). Clause 6 of Paragraph 1 Section II "Final Provisions" of the Law № 1914 stipulates that amendments to Sub-paragraph 215.3.1 Paragraph 215.3 Article of the Code regarding the excise tax rates on alcoholic beverages entered into force on the first day of the third month from the date of entry into force of this Law, i.e. on March 1, 2022.

Excise tax payers - producers (importers of labeled products) of beer submit to the controlling body section A "Tax obligations on ethyl alcohol and other alcohol distillates, alcoholic beverages, beer and products containing ethyl alcohol of 8.5%" as a part of the excise tax declaration percentage of volume units and more", annex 1 "Calculation of the excise tax amount on excisable goods (products) (except vehicles) for which specific excise tax rates have been set (except for operations defined by Sub-paragraphs 213.1.9, 213.1.11, 213.1.12 of Sub-paragraph 213.1 Article 213 Section VI of the Code )" and annex 4 "Turnovers exempted from taxation at zero or reduced rate" (if necessary).