Taxpayers, attention!

Changes that have taken place in legislation in control over turnover of excisable products (goods) in connection with adoption by the Verkhovna Rada of Ukraine of the Law of Ukraine № 3193-IX as of 29.06.2023 "On amendments to the Tax Code of Ukraine and some laws of Ukraine regarding simplification of production conditions of distillates by small business entities"

Law of Ukraine № 3193-IX as of 29.06.2023 "On amendments to the Tax Code of Ukraine and some laws of Ukraine regarding simplification of production conditions of distillates by small business entities" entered into force starting from 23.11.2023, which made changes, in particular, but not exclusively to:

1) Tax Code of Ukraine (hereinafter – Code), which, in particular:

definition of "ethyl alcohol" has been clarified (Sub-paragraph 14.1.237 Paragraph 14.1 Article 14 of the Code), from which such product as "alcohol distillate" has been singled out and, accordingly, given a separate definition (Sub-paragraph 14.1.237¹ Paragraph 14.1 Article 14);

it has been established that raw ethyl alcohol, which is subject to excise tax at the 0 UAH rate per 1 liter of 100 percent alcohol, can be used for production of bioethanol not only within limits of one business entity (Sub-paragraph "g" of Sub-paragraph 229.1.1 Paragraph 229.1 Article 229 of the Code). Herewith, norm regarding issuance of tax invoice to bioethanol producers, who use raw ethyl alcohol for production of bioethanol (Sub-paragraph "g" of Sub-paragraph 229.1.5 Paragraph 229.1 Article 229 of the Code) has been extended. At the same time, tax bill is not issued by business entities that are simultaneously producers of raw ethyl alcohol and bioethanol (Sub-paragraph "g" of Sub-paragraph 229.1.16 Paragraph 229.1 Article 229 of the Code).

2) Law of Ukraine № 481/95-VR as of 19.12.1995 "On state regulation over production and turnover of ethyl alcohol, cognac and fruit alcohol, alcoholic beverages, tobacco products, liquids used in electronic cigarettes and fuel" (hereinafter – Law  № 481):

separate provisions and title of the Law № 481, title of the Unified register of licensees for production and turnover of ethyl alcohol, alcohol distillates, alcoholic beverages, tobacco products and liquids used in electronic cigarettes have been clarified in the alcohol distillates part, as well as definition of a number of terms has been clarified;

new terms have been introduced, in particular, regarding spirits, spirit distillates, spirit drinks, small distillate productions. Therefore, alcohol distillates include cognac alcohol, fruit alcohol, grape alcohol distillate, raw fruit alcohol, grain, wine, beer distillates and other alcohol distillates stipulated by legislation;

requirements for material and technical base of small distillate productions and restrictions on production and bottling them into consumer containers of alcoholic beverages exclusively of own production (not purchased) have been established. At the same time, a ban has been established on the use of purchased alcohol distillates for production of alcoholic beverages, as well as import and purchase of alcohol distillates by small distillate producers;

grounds for canceling production license for small distillate productions have been clarified and added;

requirements for handling main and/or tail fraction of alcohol distillates (distillation waste), which are sent to distillation and/or rectification, and/or utilization, and/or destruction at choice of the alcohol distillate manufacturer have been clarified and added. For disposal and/or destruction, such distillation waste is transferred exclusively to business entities that have license to carry out economic activities for the management of hazardous waste. Utilization and/or destruction of main and/or tail fractions of alcohol distillates is carried out according to legislation on waste;

keeping separate records of handling of main and/or tail fractions of alcohol distillates has been introduced for producers of alcohol distillates;

it is established that the wholesale of cognac alcohol (including distillates in the form of main and tail fractions) will be carried out by business entities based on license for production of cognac and alcoholic beverages using cognac technology;

it is established that export and wholesale of self-produced alcohol distillates will be carried out by business entities that have licenses for production of alcohol distillates, without obtaining separate license for the wholesale of alcohol distillates;

it is established that export and wholesale of alcohol distillates (except for export and wholesale of alcohol distillates of own production) will be carried out by business entities that have license for the wholesale of alcohol distillates;

it is established that import of alcohol distillates will be carried out by business entities that have license for the wholesale of alcohol distillates or have licenses for production of alcohol distillates, without separate license for the wholesale of alcohol distillates;

it is established that the wholesale of distilled grape spirit and raw fruit spirit will be carried out by their producers – business entities that have received license for production of ethyl alcohol;

small distilleries are granted a right to carry out wholesale of spirits produced from self-produced spirit distillates in a volume not exceeding 10 thousand decaliters per calendar year, on the basis of license for production of alcoholic beverages, and retail sale – on the basis of license for the retail sale of alcoholic beverages;

annual fee for licenses for the wholesale for small distillate productions was established in the amount of 30 thousand UAH;

ban on the retail sale, except for ethyl alcohol, has also been extended to alcohol distillates and bioethanol;

grounds for canceling license for the wholesale and retail sale of alcoholic beverages, tobacco products, liquids used in electronic cigarettes, fuel and fuel storage in terms of compiling act establishing the fact of absence of business entity at the place of activity that is subject to licensing have been clarified, and act certifying the business entity’s refusal or its officials (officials) without legal grounds to allow authorized officials of the controlling body to conduct audit, in particular, it is provided for attachment of the multimedia information to such acts regarding recording of the specified fact by technical devices and/or technical means that perform or have functions of photo, film, video or sound recording, and/or photo, film, video or sound recording;

it is established that import and export of brandy alcohol will be carried out by business entities that are equipped with oak containers or stainless or enameled containers with oak rivets for keeping brandy alcohol, qualified specialists and their own production capacities for production of brandy alcohol, cognac and alcoholic beverages using cognac technology and have licenses for production of brandy alcohol;

it is established that sale of raw ethyl alcohol by its producers who have license for production of raw ethyl alcohol, without obtaining separate license for the wholesale of ethyl alcohol, will be carried out exclusively by business entities that have licenses for production of undenatured ethyl alcohol, denatured ethyl alcohol, bioethanol and/or for export;

extended to business entities that have licenses for production and/or wholesale of alcohol distillates and carry out such activities and/or export, import of the specified products, mandatory requirements of monthly by the 10th of following month, submission of report on production volumes and/or turnover (including import and export) of alcohol distillates, alcoholic beverages to the controlling body and, accordingly, liability for non-submission or untimely submission of report, or submission of report with inaccurate information on the volume of production and/or turnover ( including import and export) of alcohol distillates;

introduced for small distilleries that have license for production of alcohol distillates, license for production of alcoholic beverages and/or a license for the wholesale and/or retail sale of alcoholic beverages, quarterly not later than the 20th of month following reporting quarter, submission of report on production volumes and/or turnover (including export) of alcoholic beverages to the controlling body and, accordingly, liability for non-submission or untimely submission of report or submission of report with inaccurate information on production volumes and/or turnover (including import and export) of alcoholic beverages;

liability of small distilleries for their sale of alcoholic beverages exceeding 10 thousand deciliters per calendar year has been introduced in the amount of 200 percent of the value of sold product batch, but not less than 17 thousand UAH.