Includes information on average tariff rates and types that U.S. firms should be aware of when exporting to the market.
According to Article VII of the Law of Ukraine on Foreign Economic Activity, Ukraine’s import tariff schedule includes three rates of import duties:
- Full - The full rate of import duties can be from two to 10 times higher than the Most Favored Nation rate.
- Most Favored Nation (MFN) - Upon becoming a WTO member in 2008, Ukraine applied new, lower MFN rates to all goods originating from WTO members, in agreement with Article I of the 1994 GATT.
- Preferential - Preferential rates (lower than the MFN rates) apply to imports from countries with which Ukraine has a Free Trade Agreement (FTA) or other preferential trade agreement, i.e., imports primarily from CIS countries.
Although Ukraine has three import duty rates mentioned above, Ukraine has not established full rate duties though it equalized preferential and MFN rates. Therefore, there is only one import duty rate applicable to all trading partners, including the United States.
Most customs tariffs are levied at ad valorem rates, and only 1.5 % of tariff line items are subject to specific or combined rates of duty. The average applied tariff rate fell to 4.95 % after WTO accession and further decreased to 4.8 % in 2011.
Current customs duty rates are set by two Supplements to the Law on Customs Import Tariff of Ukraine № 584-VII. Interested American exporters can learn about current Ukrainian customs duty rates by first browsing the U.S. Harmonized Tariff Schedule for the specific numeric code(s) for the exported product, and then match the code(s) to the Ukrainian Customs Tariff Schedule. The 6-digit HS Codes coincide for both Schedules. Please contact FCS Kyiv office for 10-digit codes interpretation.
In addition to customs duties, the following goods are also subject to excise tax pursuant to Article 215 of the Tax Code of Ukraine:
- Ethyl alcohol and other distillates, alcoholic beverages, beer
- Tobacco products, tobacco, and manufactured tobacco substitutes
- Liquids used in electronic cigarettes
- Passenger cars, body thereto, trailers, motorcycles, vehicles designed for transportation of 10 persons or more, goods-carrying vehicles
Excise duties are assessed as a percentage of the sum of the declared customs value, customs duties, and fees paid for importing products. Excise rates are in Article 215 of the Tax Code of Ukraine № 2755-VI. Tariffs and excise payment must be made in Ukrainian currency at the Ukrainian National Bank exchange rate effective on the day of payment.
The VAT rate is 20 % on most goods.
Because VAT repayments used to be a contentious issue, with many foreign companies owed millions of dollars in VAT refunds in 2015 and 2016, the Government of Ukraine introduced significant changes to the VAT refund procedure. Refunds are now based on the Register of VAT Refund Claims. Also, VAT refunds are paid automatically in chronological order of the receipt of VAT refund applications. There are currently signs, however, that as a result of the on-going conflict, these VAT refunds have again slowed.
Ukraine has introduced a number of import relaxations to ensure efficient operation of customs formalities during martial law. The key changes are established in Law No. 2142 – IX. In particular, the following relaxations apply:
- No import duty for goods imported by legal entities for free circulation (except for certain excise goods, e.g., ethyl alcohol and other alcohols distillates, alcoholic beverages, tobacco products)
- No VAT, import duty and excise tax on cars and other vehicles imported by individuals
- No VAT on goods imported by taxpayers under single tax groups I to III, such taxpayers may declare goods based on the preliminary customs declaration and the customs formalities will not exceed one hour
There is also an import duty exemption and suspension of nontariff regulations for the listed goods during martial law, such as:
- Special personal protective equipment (helmets, tactical vests, etc.) supplied for the purposes of law enforcement agencies, armed forces and other military formations, including territorial defense units
- Listed medicine and medical devices, including those without registration in Ukraine.