Business entities that in the customs territory of Ukraine carry out operations on physical transfer (sale, shipment) of fuel in consumer containers up to 5 liters inclusively (except for the sale of such fuel by its producers) are not considered to be payers of the excise tax on the sale of fuel and can carry out these operations without obtaining licenses.
It should be reminded that Law of Ukraine as of 22.11.2018 №. 2628 –VІII “On amendments to the Tax Code of Ukraine and some other legislative acts of Ukraine on improving the administration and revision of the rates of individual taxes and fees” (hereinafter - Law №. 2628-VII) prescribed amendments to the Tax Code of Ukraine (hereinafter referred to as the TCU) and the Law of Ukraine as of 19.12.1995 №. 481 “On the state regulation of production and turnover of ethyl, cognac and fruit alcohol, alcohol beverages and tobacco products” (hereinafter - Law №. 481).
The STS explains
amendments made by the Law of Ukraine №. 2628 –VІII regarding business entities that sell fuel in consumer containers up to 5 liters inclusively:
Regarding the definition of the term “sale of fuel”
Operations on physical transfer (sale, shipment) of fuel in consumer containers up to 5 liters (inclusively) except for the sale of such fuel by its producers (Sub-paragraph. 14.1.212. Paragraph. 14.1 Article. 14 of the TCU) are not considered as the sale of fuel from 01.07.2019.
Regarding the excise tax on the sale of fuel
Change in circle of the excise tax payers on the sale of fuel is the consequence of changing the definition of the term “sale of fuel”.
The excise tax payer on the sale of fuel is:
- individual – business entity that imports excisable goods (products) to the customs territory of Ukraine (Sub-paragraph 212.1.2 Paragraph. 212.1 Article. 212 of the TCU);
- individual (including a legal entity that keeps track of the results of activities under a joint venture agreement without creating a legal entity) that sells fuel or ethyl alcohol (Sub-paragraph 212.1.15 Paragraph. 212.1 Article. 212 of the TCU);
Please note that in case of import of fuel by a business entity to the customs territory of Ukraine such entity is considered as the excise tax payer according to Sub-paragraph 212.1.2 Paragraph. 212.1 Article. 212 of the TCU and should pay the excise tax before or on the day when the customs declaration is filed according to Sub-paragraph 222.2.1 Paragraph. 222.2 Article. 222 of the TCU.
As follows, from 01.07.2019 on the import to the customs territory of Ukraine of fuel exclusively in consumer containers up to 5 liters (inclusively), there is an obligation to pay the excise tax; within the further sale of fuel in such container, the entity does not carry out operations on sale of fuel in the context of Sub-paragraph. 14.1.212 Paragraph. 14.1 Article 14 of the Code, accordingly such entity is not the payer of excise tax on the sale of fuel, and the entity does not have the obligation to make excise invoices for such operations. Such business entity is not the administrator of the excise warehouse and has no obligation to register the excise warehouse.
Regarding the obtaining of licenses
Licensing of activity carried out by the business economic entities involved in the production, storage, wholesale and retail sale of fuel (Law №. 481) was introduced from 01.07.2019.
According to Article 1 of the Law №. 481:
wholesale of fuel – is activity for the purchase and further sale of fuel with or without alteration of its physico-chemical characteristics to retail and / or wholesale business entities and / or other entities;
retail sale of fuel – is activity for the purchase or receipt and subsequent sale or realization of fuel with or without alteration of its physico-chemical characteristics from a fuel station / gas station / fuel filling station / gas filling station and other retail outlets through the fuel dispensers and / or oil dispensers;
storage of fuel – is activity for the storage of fuel (own or received from other individuals) with or without change of its physico-chemical characteristics.
Term “fuel” is used in the Law №. 481 in the sense given in the Code.
Taking into account that the Law №. 481 does not define the term “sale of fuel” and based on Sub-paragraph. 14.1.212 Paragraph 14.1 Article 14 of the TCU, in the customs territory of Ukraine business entities may carry out operations on physical transfer (sale, shipment) of fuel in consumer containers up to 5 liters (inclusively), except for the sale of such fuel by its producers, without obtaining licenses according to the requirements of the Law №.. 481.