Business news from Ukraine

Registrations of imported used foreign cars in Ukraine in July fell by almost half compared to June

In July of this year, 45.8 thousand used cars were added to the Ukrainian car fleet, which is 16% less than in July last year, and also 46% less than in June this year (the last month of preferential customs clearance) .
According to the information of the association “Ukravtoprom” in the Telegram channel, the lion’s share (75%) were registrations of cars older than 10 years, 15% – from 6 to 10 years, 10% – under 5 years old.
Most used cars in July were issued in the Lviv region (14% of the total), Volyn registration received 11% of cars, the third result was in the Rivne region – 8% of registrations.
Most often, Volkswagen cars are still registered, with 2.8 thousand used Volkswagen Passats and 2.7 thousand used Volkswagen Golfs registered in July. They are followed by Renault Megane – 2.2 thousand units, Skoda Octavia – 1.7 thousand units, Ford Focus – 1.3 thousand units.
In total, according to Ukravtoprom, in January-July, 310.2 thousand used cars were registered in Ukraine, which is almost a quarter more than in the same period last year.
According to the State Customs Service, given in the message, for the entire period of benefits (April-June 2022), almost 237 thousand vehicles were imported into Ukraine, including 9.272 thousand cars in July, of which 9.249 thousand were used.
As reported, the initial registration of new passenger cars in January-July amounted to 21.5 thousand units. – 63% less than a year earlier, including 3,648 thousand cars registered in July – 63% less than in July 2021, but 26% more than in June 2022.

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AFTER ABOLITION OF CUSTOMS CLEARANCE BENEFITS, ALMOST 5 THOUSAND CARS WERE IMPORTED TO UKRAINE IN 10 DAYS

In the first 10 days after the abolition of benefits, Ukrainians cleared 4,600 cars through customs and paid UAH 464 million to the budget, the State Customs Service reported.
“For 10 days of customs clearance of vehicles, almost UAH 464 million was paid to the state budget. From July 1 to July 10, the State Customs Service issued 4,662 units of vehicles purchased abroad with customs payments,” the agency said on the Telegram channel on Tuesday.
As the customs reminded, benefits for the import of goods, including cars, have been canceled since July 1. Thus, at present, imported vehicles are again subject to import duties, and individual entrepreneurs of groups 1-3, who are not VAT payers, must again import goods with VAT.

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MORE THAN 200 THOUSAND CARS WERE IMPORTED TO UKRAINE FROM EUROPE ON PREFERENTIAL TERMS

Ukrainians imported 211,000 cars from Europe on preferential terms, and the number of imported cars increased by 48,000 in two weeks, Yaroslav Zheleznyak, deputy head of the Verkhovna Rada committee on finance, tax and customs policy, said.
“As of June 27, 211,000 cars entered Ukraine under preferential customs clearance. Over the past 2 weeks, an additional 48,000 cars have been brought in,” he said on the Telegram channel on Monday.
The total amount of the benefits provided amounted to UAH 23.5 billion, he added.
After the news about the abolition of benefits from July 1, as envisaged by the legislative changes adopted by the Parliament, the pace of car imports has increased significantly. On weekdays in June, an average of 4.7 thousand cars are imported per day compared to 3.2 thousand in May, the People’s Deputy specified.
“In fact, it would probably be many times more, the throughput capacity of foreign and our customs limits. To understand, there are now a line of 1000 cars and 9.5 km at the same Budomez-Grushev, the Polish side passes very slowly. At the checkpoint” Yagodin “The queue is generally 40 km,” Zheleznyak pointed out.
“It is also significant that four times more than usual was imported over the weekend. This Saturday, 2,400 cars drove in, although this figure was usually less than 650 cars on weekends,” he added.

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UKRAINE IN 2020 IMPORTED 531,400 VEHICLES WORTH MORE THAN $ 4.2 BLN

Ukraine in 2020 imported 531,400 vehicles worth more than $ 4.2 billion, including 486,300 passenger cars for almost $ 3.5 billion, Ukrautoprom reported.
“Compared to 2019, import of passenger cars decreased by 11%,” the association’s website says.
The largest supplier of passenger cars last year was Germany, from where 99,772 cars were imported for $ 548.1 million.
Imports of trucks and special vehicles last year decreased by 16%, to 43,500 units, and the suppliers of these vehicles earned $ 717.4 million against $ 841.9 million a year earlier. In this segment, Germany was also the largest supplier with 9,589 vehicles for $ 114 million.
The purchase of buses abroad cost Ukraine $ 64.1 million: 1,600 buses were purchased, which is 35% less than a year earlier.
“Despite the fact that the largest number of buses in 2020 came to Ukraine from Germany (568 units), Belarus earned more than others from the supply of this type of transport – $ 38.6 million for 307 buses,” the association says.

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PARLIAMENT APPROVES PREFERENTIAL CONDITIONS FOR IMPORTED EQUIPMENT FOR ELECTRIC VEHICLES PRODUCTION UNTIL 2028

The Verkhovna Rada of Ukraine has approved some fiscal incentives for the development of electric transport in Ukraine, in particular, VAT and import duty exemption from 2021 until 2028 for equipment and spare parts for own production of electric transport (passenger cars, electric buses, electric trucks and special-purpose vehicles).
Bill No. 3476 amending the Tax Code and bill No. 3477 amending the Customs Code were passed at the first reading by 316 and 308 lawmakers respectively.
The proposed exemption will not apply only to equipment for the production of trolleybuses, because their output has already been established in Ukraine.
In addition, bill No. 3476 proposes to exempt the electrical industry companies selling electric motors for the production of electric vehicles (with the exception of trolleybuses), lithium-ion batteries, chargers, as well as automobile companies selling electric cars of their own production from paying income tax until December 31, 2033.
The bill proposes to extend or expand benefits for importers and buyers of electric vehicles.
It is proposed, in particular, to extend the VAT exemption for import and/or supply of electric cars until December 31, 2025 (currently the benefit is valid until the end of 2022).
A buyer of an electric car before December 31, 2030 is also offered to be exempted from paying the mandatory pension insurance fee, be provided with a tax discount on the payment of personal income tax, but these standards are proposed to be introduced from January 1, 2026.
According to an explanatory note to the bills, there is a sufficient industrial potential of Ukraine in the production of electric vehicles. In particular, there are five bus plants, a truck plant, and the facilities, which produce 300,000 passenger cars at three plants.
However, today the government is stimulating the import of electric vehicles, not their production. In particular, from January 1, 2016, there is no import duty, exemption from VAT is extended until 2022 and the excise rate is set at EUR 1 per 1 kW/h of battery capacity.
“The introduction of preferential taxation increased the import of electric vehicles from 1,706 vehicles in 2016 to 7,542 vehicles in 2019, but used electric vehicles are dominating in the market (93% in 2019),” the authors of the bills said.

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MEXICO STARTS NEXT REVIEW OF SAFEGUARD DUTIES ON IMPORTED HOT ROLLED SHEETS FROM UKRAINE, RUSSIA

The Economy Secretariat (Secretaría de Economía) of Mexico has announced the launch of an administrative procedure for reviewing safeguard duties imposed on hot rolled sheets originated from Ukraine and Russia.
According to the announcement made on March 26, 2020 on official website of the Mexican government bulletin, the duties are being reviewed as the duties imposed earlier expired.
According to the document, safeguard duties on hot rolled sheets were imposed by Mexico on March 28, 2000 in the amount of 46.66% for Ukraine and 30.31% for Russia. On March 17, 2006, the duties were extended. After the new revision on September 8, 2011 it was decided to cut the duties for Ukraine to 25% and to 21% for Russia. On January 28, 2016 it was decided to extend the duties.

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