The Law of Ukraine as of 16.01.2020 № 466-IX “On amendments to the Tax Code of Ukraine to improve tax administration, eliminate technical and logical inconsistencies in tax legislation” (hereinafter - the Law № 466) amended the Sub-paragraph 215.3.21 Paragraph 215.3 Article 215 Section VI of the Tax Code of Ukraine (hereinafter – the Code) in terms of introduction of the ad valorem rate of excise tax on cigarillos (small cigars) from 01.01.2021, including cigarillos with cut ends, containing tobacco (code according to Ukrainian classification of the FEA goods 2402 10 00 90).
Article 220 Section VI of the Code determines peculiarities of calculating the excise tax on tobacco products at the ad valorem rates.
According to Paragraph 220.1 Article 220 Section VI of the Code, manufacturers and importers of tobacco products set the maximum retail prices for excisable goods (products) (hereinafter – the MRP) by declaring such prices.
The Code stipulates terms for submission of Declaration on the maximum retail prices (hereinafter – the Declaration) and introduction of the maximum retail prices:
Declaration is submitted by the manufacturer or importer of excisable goods (products) to the central executive body that implements state tax policy, not later than the 10th and 25th day of the month (Paragraph 220.4 Article 220 of the Code);
Maximum retail prices set by the manufacturer or importer of goods (products) listed in the Declaration are introduced not later than the 10th day of the month when the Declaration is submitted and set not later than the 25th day – from the 1st day of the month following the month when the Declaration is submitted to the central body of executive power that implements the state tax policy and is valid until their change in a manner prescribed by the Code (Paragraph 220.7 Article 220 of the Code).
As follows, in order to comply with the Code on the introduction of maximum retail prices for cigarillos from 01.01.2021, manufacturers and importers of these tobacco products must submit the Declaration on maximum retail prices for cigars, including cut-off cigars, containing tobacco by the 25th of December 2020.