Free customs clearance of cars and goods during martial law in Ukraine

The law on preferential imports signed by the President of Ukraine during martial law exempts entrepreneurs from paying import duties and VAT. Payers of single tax I-III of the third group at a rate of 2% of turnover can go through a simplified procedure for customs clearance of goods and cars.

A simplified method of customs control concerns the import of vehicles by citizens. The adopted law provides for the submission of a preliminary customs declaration and does not require a customs examination. There is a period of up to six months during which full reporting is required after the expiration of the grace period. Only certain categories of goods and cars are exempted from import duty taxation.

How to clear goods and which cars are not subject to customs clearance.

According to the Law (the text published in the "Voice of Ukraine" can be viewed at the link), the following are exempt from customs clearance:

• Goods imported (sent) to the customs territory of Ukraine by enterprises for free circulation, except for ethyl alcohol and other alcoholic distillates, alcoholic beverages, beer (except for "live" fermented kvass), tobacco products, tobacco, industrial tobacco substitutes, liquids are used in electronic cigarettes;
• Cars, bodies for them, trailers and semi-trailers, motorcycles, vehicles intended for the transport of 10 people or more, vehicles for the transport of goods imported by citizens into the customs territory of Ukraine for free circulation.

Exemption from taxation does not apply to goods originating from a country recognized by the occupying state by law and / or recognized as the aggressor state in relation to Ukraine according to the law, or imported from the territory of the occupying state (aggressor) and / or from the occupied territory of Ukraine, defined as such by law.

 From April 2022 in Ukraine, free customs clearance of cars

From April 1, 2022, for the period of martial law in Ukraine, citizens are given the opportunity to clear a car, motorcycle, minibus and even a truck for free.

However, this tax exemption does not apply to vehicles and goods.

• Originating from the aggressor country
• Imported from the territory of the occupying state
• Imported from the temporarily occupied territory of Ukraine.

Until the termination or cancellation of martial law in Ukraine, the duty is not levied on cars imported by citizens into the customs territory of Ukraine for free circulation. Simplified procedure for customs clearance of goods in Ukraine in wartime conditions

Ukraine has decided to limit customs clearance points for cars from the EU for its own needs, as this creates difficulties with the delivery of humanitarian goods. You can clear a car from Europe for your own needs at a zero rate at three checkpoints to Ukraine.

• Checkpoint for international passenger road communication "Ustilug" (on the border with Poland);
• International checkpoint for road traffic "Grushev" (on the border with Poland);
• International checkpoint for road traffic "Small Berezny" (on the border with Slovakia).

The restrictions come into effect on April 25.

On March 20, the Cabinet of Ministers of Ukraine adopted Resolution No. 330 "Some Issues of Customs Control and Customs Clearance of Goods, Including Vehicles, Under Martial Law". Citizens and entrepreneurs are given the right to choose one of two ways of their customs clearance and customs control:

• A simplified method, providing that customs control and customs clearance of goods, in particular vehicles, imported into the customs territory of Ukraine through checkpoints across the state border of Ukraine, open to sea, road and rail traffic, is carried out without the collection of customs payments, including tax value added tax, excise tax, import duty, by submitting a preliminary customs declaration by the declarant to the customs authority without customs inspection, without the use of phytosanitary control, measures of non-tariff regulation of foreign economic activity (except for state export control) directly at the checkpoints (control points) through the state and the customs border of Ukraine (hereinafter the simplified method);
• A standard method providing that customs control and customs clearance of goods, including vehicles, are carried out in full in accordance with the requirements of the Customs Code of Ukraine, and taxation of imported goods, including excise tax and value added tax, is carried out on a common grounds established by the Tax Code of Ukraine (hereinafter referred to as the standard method).

simultaneous use of both methods is not allowed. The procedure for customs clearance of goods in Ukraine cannot be applied to goods and cars that are not subject to preferential customs clearance. The application of the simplified method provides for the submission to the State Customs Service of the relevant application in the form in paper or electronic form.

An application in paper form is submitted directly at the checkpoint across the customs border or to the relevant customs office.
You can refuse to use this method by submitting an appropriate application to the State Customs Service. But then re-submission of the application in a simplified way is prohibited.

Why imported cars are equated with humanitarian aid

After the start of the full-scale invasion of Russia from abroad, only those vehicles were imported into Ukraine that were necessary for the military, the evacuation of citizens and the delivery of various cargoes with humanitarian goods. On March 1, the Ukrainian government decided to equate the import of cars with humanitarian aid, so that this could take place under a simplified procedure. The only thing that was needed was to add the permission of the regional military administration to the declaration.

But these rules decided to weaken. Initially, the government allowed to defer the payment of customs duties to all citizens. That is, in order to import foreign vehicles into Ukraine, it was only necessary to fill out a special application and sign it. In the third decade of March, it was decided to abandon the need for customs clearance of cars during the war. However, then these innovations affected only the military.
According to the new document dated April 1, 2022, all citizens of Ukraine have the right to import the following vehicles into the country without paying excise duty, VAT and import duty:

• Cars and bodies for them;
• Semitrailers and trailers;
• Cargo vehicles and vehicles suitable for transporting more than 10 people;
• Motorcycles.

Such preferential conditions will not be permanent. They are provided only for the period of martial law in Ukraine.
According to Vita Miroshnichenko, Head of Customs Regulation and International Trade Practice at PwC Ukraine, the law obliges all foreign cars to be registered according to a simplified procedure. That is, all formalities must be completed in a maximum of an hour.

What do you need to import a car from abroad under a simplified procedure?

Do not forget that in addition to customs clearance of a car, which will be free during martial law, Ukrainians will face other expenses and various important points:

• Ukrainians are still waiting for certain expenses not related to customs clearance of a car - it will be necessary to pay 3-5% of the cost of a car to the pension fund for the first registration, as well as 114 hryvnia for a certificate form, 190.15 hryvnia for registration and 135 hryvnia for registering a license plate;
• Some problems may arise with the very procedure for importing a car into Ukraine, because for the period of martial law, men aged 18 to 60 are prohibited from leaving the country (although there are exceptions), so there are two options:

1. A woman or an authorized person can buy a car and import it from abroad, to whom a power of attorney certified by a notary is issued;
2. You can use the services of companies involved in the import of cars (the service is paid and depends on the prices of the company itself).

Since Russian troops are blocking Ukraine's maritime communications, it is almost impossible to deliver cars from the USA, Georgia or Korea, and therefore you can only look for transport in the EU countries.

Also, you should not expect a sharp decrease in cost even after the abolition of the need for customs clearance during martial law. The Institute for Automotive Research says that the price will drop, but not for all models. The process of decline will be gradual, without a rapid collapse.