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18 August 2020, 07:11
Pension tax exemption on electric cars and providing incentives for their production in Ukraine
The Committee considers two draft laws No. 3476 and No. 3477, which
offer additional benefits for the import of electric vehicles into
Ukraine and propose to create special conditions to stimulate the
production of electric vehicles, their components and chargers in
Ukraine.
According to Bloomberg, the share of electric cars in the world by 2040 will reach 57% of total car sales, and the share of electric buses will exceed 80%. According to the National Transport Strategy of Ukraine, it is planned to increase the share of electric cars in our country to 75% by 2030.
What are the conditions for importing electric cars to Ukraine today?
- Starting from January 1, 2016, Ukrainians do not pay import duties.
- From 2018 to December 31, 2022 the import of electric vehicles into Ukraine is exempt from value added tax. The hybrid cars do not meet these criteria.
- The rate of excise tax for electric cars is set at 1 euro per 1 kilowatt-hour of electric battery capacity of such vehicles.
- At the same time, Ukrainians pay a 4.8% levy to the Pension Fund when registering a car.
Due to the listed tax benefits, the number of electric cars imported to Ukraine increased from 1706 units in 2016 to 7542 in 2019. However, the authors of the draft laws No. 3476 and No. 3477 believe that the benefits for the import alone are not enough. They estimated that Ukraine has industrial capacity to become a low-cost production site for electric vehicles.
What is suggested in the draft laws No. 3476 and No. 3477?
Draft law No. 3476 suggests:
- to provide tax discount on the payment of personal income tax to buyers of electric vehicles for the period until December 31, 2030;
- temporarily, till December 31, 2025, to suspend value added tax on the import of electric vehicles and until December 31, 2028 — for the components for their production;
- temporarily, till December 31, 2033, to suspend income tax for the manufacturers of electric vehicles and their components — motors, batteries, chargers;
- temporarily — till December 31, 2030 – to suspend pension insurance fee when buying electric cars.
Draft law 3477 suggests: temporarily, until January 1, 2029, to suspend import duties on the components of the electric vehicles.
The authors of the draft laws are convinced, that these changes will help to increase the share of environment friendly transport in Ukraine to 30-35% by 2030 and will help to reduce energy dependence and air pollution. The Committee will provide its opinion on the suggested drafts at a forthcoming meeting.
According to Bloomberg, the share of electric cars in the world by 2040 will reach 57% of total car sales, and the share of electric buses will exceed 80%. According to the National Transport Strategy of Ukraine, it is planned to increase the share of electric cars in our country to 75% by 2030.
What are the conditions for importing electric cars to Ukraine today?
- Starting from January 1, 2016, Ukrainians do not pay import duties.
- From 2018 to December 31, 2022 the import of electric vehicles into Ukraine is exempt from value added tax. The hybrid cars do not meet these criteria.
- The rate of excise tax for electric cars is set at 1 euro per 1 kilowatt-hour of electric battery capacity of such vehicles.
- At the same time, Ukrainians pay a 4.8% levy to the Pension Fund when registering a car.
Due to the listed tax benefits, the number of electric cars imported to Ukraine increased from 1706 units in 2016 to 7542 in 2019. However, the authors of the draft laws No. 3476 and No. 3477 believe that the benefits for the import alone are not enough. They estimated that Ukraine has industrial capacity to become a low-cost production site for electric vehicles.
What is suggested in the draft laws No. 3476 and No. 3477?
Draft law No. 3476 suggests:
- to provide tax discount on the payment of personal income tax to buyers of electric vehicles for the period until December 31, 2030;
- temporarily, till December 31, 2025, to suspend value added tax on the import of electric vehicles and until December 31, 2028 — for the components for their production;
- temporarily, till December 31, 2033, to suspend income tax for the manufacturers of electric vehicles and their components — motors, batteries, chargers;
- temporarily — till December 31, 2030 – to suspend pension insurance fee when buying electric cars.
Draft law 3477 suggests: temporarily, until January 1, 2029, to suspend import duties on the components of the electric vehicles.
The authors of the draft laws are convinced, that these changes will help to increase the share of environment friendly transport in Ukraine to 30-35% by 2030 and will help to reduce energy dependence and air pollution. The Committee will provide its opinion on the suggested drafts at a forthcoming meeting.