Business news from Ukraine

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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NISSAN STILL LEADING IN REGISTRATION OF ELECTRIC VEHICLES IN UKRAINE

The registrations of new and used electric vehicles in Ukraine in January-June of this year increased by 16% compared to the same period in 2019, to 3,384 units, the Employers’ Federation of the Automotive Industry of Ukraine has reported.
According to data with reference to the Interior Ministry, in the second quarter of the current year, registrations increased by 10%, to 1,776 units.
The association clarifies that registrations included the initial registration and registration of vehicles brought from abroad by customs or on customs clearance certificates (not included in statistics of re-registration and temporary registration), while the share of primary registrations accounted for 24% (against 29% a year earlier).
Nissan is steadily leading the market, which covers 39% of the market, although the registrations of these cars decreased by a quarter from the first half of 2019, to 1,168 units.
At the same time, Tesla significantly strengthened its presence, occupying 30% of the market and increasing registration rates by 2.5 times, to 909 cars.
The third position in the ranking by a large margin from the leaders is occupied by Chevrolet with a market share of 6% and an increase in registrations of 68%, to 181 units.
The next two brands Volkswagen and Fiat ranked fourth and fifth in the ranking with indicators of 5% each, displacing the position of BMW.
The most popular models in the first half of the year were Nissan Leaf (34%), Tesla Model S and TESLA Model 3 (10% each), and the latter tripled registration to 347 units.
The fourth most popular car was Chevrolet Bolt Ev (5%), the fifth Volkswagen e-Golf (4%).

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