Business entities may carry out tobacco growing activities on the basis of license for a right to grow tobacco. Such licensing was introduced from January 1, 2025.
License is granted subject to conditions (grounds):
- registration or accounting of business entity at the tax authorities;
- notification by such business entity of the taxation objects and objects related to taxation through which relevant type of licensed activity will be carried out, according to requirements of Paragraph 63.3 Article 63 of the Tax Code of Ukraine;
- completing electronic identification online in the electronic cabinet in compliance with requirements of the Law of Ukraine "On electronic identification and electronic trust services" and corresponding with the controlling authority through the electronic cabinet according to application accepted by the controlling authority for a wish to receive documents through the electronic cabinet;
- business entity is the owner of agricultural land plots or uses such land plots under another right.
License validity period and license fee
License is granted for the indefinite period, and fee for it is paid annually. Annual fee (for each place of performance of relevant economic activity type) is 0.15 of the minimum salary established by the law as of January 1 of the reporting (tax) year in which payment is made.
It is possible to find out about procedure for obtaining administrative service for provision of relevant license and list of documents required for its receipt, as well as the list of grounds for refusal to provide administrative service at the link:
https://tax.gov.ua/administrativni-poslugi/poslugi-dps/litsenzuvannya/nadannya-litsenziy/.
Wholesale of tobacco raw materials on the territory of Ukraine is carried out if the business entity has license for a right to grow tobacco or license for a right to ferment tobacco raw materials, or license for a right to produce tobacco products.
Please note: the retail sale of tobacco raw materials on the territory of Ukraine is prohibited.
Storage of tobacco raw materials – storage places of tobacco raw materials must be entered into the Unified Register of Storage Places, taking into account requirements of Article 21 of the Law № 3817.
Reporting
Business entities that received license for a right to grow tobacco have to annually, not later than February 1 of year following the reporting year, submit report on the balances, volumes of tobacco growing and sales of tobacco raw materials and sown area, starting from the first reporting period for 2025.
Liability in the form of a fine for:
- tobacco growing without license – 200% of the cost of grown tobacco, but not less than 15 times the minimum salary established by the law as of January 1 of the reporting (tax) year;
- wholesale of tobacco raw materials without license for a right to grow – 200% of the cost of sold goods (products), but not less than 3 times the minimum salary;
- non-submission or untimely submission of report or submission of report with inaccurate information on the volumes of production and/or turnover (including import to the customs territory of Ukraine and/or export outside the customs territory of Ukraine) of tobacco raw materials – 3 minimum salaries;
- sale of tobacco raw materials to business entities that are not manufacturers of tobacco products and/or tobacco fermentation plants – 200% of the cost of sold tobacco raw materials (raw materials sold in this way are subject to confiscation and destruction)
For reference:
Law of Ukraine № 3817-IX as of 18.06.2024 "On state regulation of production and circulation of ethyl alcohol, alcohol distillates, bioethanol, alcoholic beverages, tobacco products, tobacco raw materials, liquids used in electronic cigarettes and fuel".