New Car Sale Rules Implemented in Ukraine: What Drivers Need to Know.

The Cabinet of Ministers of Ukraine has obliged trading organizations to specify the real cost of cars when concluding sales agreements

The Cabinet of Ministers of Ukraine has made an important decision to improve the procedure for commission trade of vehicles. The new decree, approved on October 1, is aimed at combating the practice of underestimating the assessed value of cars, which led to significant losses in state budget revenues. According to the decree, trading organizations are obliged to determine the real cost of cars when concluding sales agreements.

According to the Head of the Main Service Center of the Ministry of Internal Affairs of Ukraine, Mykola Rudyk, this decision aims to increase revenues to the state budget. To control compliance with the new rules, the register will be improved, and cooperation with the State Property Fund and the State Tax Service of Ukraine will be established.

In particular, when selling a passenger car, if this is the second and subsequent sale in a calendar year, it will be necessary to submit an evaluation of the vehicle's value or an extract about the average market price from the website of the Ministry of Economy. For trucks, only a valuation is required.

Tax Obligations of Trading Organizations in Commission Trade of Vehicles

The new rules also clarify tax obligations:

• The sale of the first passenger car during the year is not taxed,
• The sale of the second vehicle is taxed at a rate of 5%,
• The sale of the third and subsequent - 18%,
• For cargo vehicles, the tax rate is 5% for the first sale and 18% for the second and subsequent sales.

If an understated value of the car is indicated in the sales agreement, the service center workers of the Ministry of Internal Affairs will refuse to provide the service, and the materials will be sent to law enforcement agencies, the tax service, and the State Property Fund for further investigation.

Transparency of the Procedure

To ensure the transparency of the process, detailed information on the evaluation of vehicle costs and the procedure of its conduct will be posted on the website of the Main Service Center of the Ministry of Internal Affairs. The valuation will be carried out by the Expert Service of the Ministry of Internal Affairs and authorized valuation entities.

The Director of the Scientific and Research Expert Criminalistics Center of the Ministry of Internal Affairs - head of the Expert Service, Serhiy Krymchuk, explained that to determine the market value of a car, experts use the "Bulletin of Car Goods Expert," which considers various factors such as mileage, technical condition, and equipment of the car.

It should be noted that there are about 3,500 entities in Ukraine engaged in the trade of vehicles, over 1,200 of which operate on a commission trade basis. Since December 2022, more than a thousand business entities have been blocked for violating Trade Rules.