President signed the Law of Ukraine as of 30.11.2021 № 1914-IX “On amendments to the Tax Code of Ukraine and other legislative acts of Ukraine to ensure balanced budget revenues” (hereinafter – Law № 1914) on 20.12.2021, which particularly provides for expanding the list of excisable goods for which the maximum retail prices are set by producers or importers for tobacco and industrial tobacco substitutes, liquids used in electronic cigarettes by declaring them (Sub-paragraph 14.1.106 Paragraph 14.1 Article 14 Section I of the Tax Code Of Ukraine (hereinafter – Code).
Such declaration of the maximum retail prices submitted by producers and importers of excisable goods (products) is aimed at ensuring compliance with tax obligation regarding payment of:
value added tax on tobacco products, tobacco and industrial tobacco substitutes, liquids used in electronic cigarettes (from 01.01.2022);
excise tax at the ad valorem rate (12%) for tobacco products (cigarettes with filter, cigarettes without filter and cigars);
excise tax on the retail sale of tobacco products, tobacco and industrial tobacco substitutes, liquids used in electronic cigarettes (5%) – changes come into force on 01.01.2022 but not earlier than the date of entry into force of amendments to the Budget Code of Ukraine in terms of introducing a mechanism for crediting excise tax on the sale of excisable goods by retailers – tobacco products, tobacco and industrial substitutes for tobacco and liquids used in electronic cigarettes to local budgets.
With entry into force of the Law № 1914, producers and importers are subject to tax obligation to pay value added tax (from 01.01.2022) and excise tax on retail sales (from the date of entry into force of amendments to the Budget Code of Ukraine) with maximum retail prices, which are particularly set on:
cigars, including cut-off cigars, containing tobacco (2402 10 0010 is a code according to Ukrainian classification of the FEA products) (hereinafter referred to as cigars);
tobacco-containing products for electric heating (abb. TVEN) with electronic control heater (2403 99 90 10 is a code according to Ukrainian classification of the FEA products) (hereinafter – TVEN);
tobacco and tobacco substitutes, other, industrial; tobacco “homogenized” or “reconstituted”;
tobacco extracts and essences (except for tobacco-containing products for electric heating (TVEN) with electronic control heater) (2403 is a code according to Ukrainian classification of the FEA products (except 2403 99 90 10)) (hereinafter – tobacco and tobacco substitutes (except TVEN));
liquids used in electronic cigarettes (3824 99 96 20 is a code according to Ukrainian classification of the FEA products) (hereinafter – liquids).
Code defines the deadlines for submitting declaration of the maximum retail prices (hereinafter –Declaration) and procedure for their introduction:
Declaration is submitted by producer or importer of excisable goods (products) to the central executive body that implements state tax policy not later than the 10th and 25th of the month (Paragraph 220.4 Article 220 of the Code);
maximum retail prices set by producer or importer for goods (products) listed in Declaration must be introduced not later than the 10th day of the month when Declaration is submitted and the maximum retail prices set not later than the 25th day of the month following the month when Declaration is submitted to the central body of executive power that implements state tax policy and are valid until their change in manner prescribed by the Code (Paragraph 220.7 Article 220 of the Code).
Peculiarities of filling in certain columns of Declaration taking into account the Law № 1914:
in column 2, in addition to the codes of goods (products) according to Ukrainian classification of the FEA products 2402 20 90 10, 2402 20 90 20, 2402 10 00 90, it is possible to fill in the following codes of goods (products) according to Ukrainian classification of the FEA products: 2402 10 00 10, 2403 11 00 00, 2403 19 10 00, 2403 19 90 00, 2403 91 00 00, 2403 99 10 00, 2403 99 90 10, 2403 99 90 90, 3824 99 96 2020;
in column 5 “Unit of goods (products) for which the price is set” may indicate either the package / packaging / capacity or container;
column 6 “Number of units of product per unit of goods (products) for which the price is set” states:
quantity of excisable goods (products) in pieces – for cigarettes without filter, cigarettes with filter, cigarillos, TVEN;
container capacity in liters for liquids;
net weight of excisable goods (products) in kilograms – for cigars, tobacco and tobacco substitutes (except TVEN);
indicator of column 6 “Number of units of product per unit of goods (products) for which the price is set” for liquids, cigars, tobacco and tobacco substitutes (except TVEN) may be indicated in the format of numbers with a number of decimal places – up to five.
State Tax Service, starting from 22.12.2021, has provided technical possibility to producers and importers to submit Declarations on the maximum retail prices, taking into account the above specified requirements and fulfilling their tax obligations, starting from 01.01.2022 using maximum retail prices for excisable goods (products).