All about Taxation in Ukraine - Customs Duties in Ukraine

The customs duties of any country consist of concrete rates of the customs duties which are used for the taxation of the imported or exported goods. In this article you`ll learn everything about customs duties on imported or exported merchandise.

According to article 6 of the Law of Ukraine from 5.02.92 N 2097-XII "On Uniform customs duties" the customs duties collected by customs, represent the tax over the goods and other subjects which move through customs border of Ukraine. As a rule, the customs duties carry out three basic functions:

• Fiscal - concerns both import, and export duties as they are one of elements of a state budget;
• Protectionist (protective) - concerning import duties as with their help the state protects local manufacturers from an undesirable foreign competition;
• Balancing - concerns the export duties established for the purpose of prevention of undesirable export of goods, the internal prices on which for some reasons are below the world’s.

According to article 17 of the Law of Ukraine "On Uniform customs duties" the customs duties are charged by customs body of Ukraine according to positions of this Law and rates of Uniform customs duties of Ukraine, operating at date of granting of the customs declaration, and paid both in currency of Ukraine, and in a foreign currency by the National bank of Ukraine. The customs duties are brought in the state budget of Ukraine. At definition of customs value and payment of the customs duties the foreign currency is listed in currency of Ukraine at the rate of National bank of Ukraine which is applied to payments on the external economic operations and influences day of granting of the customs declaration. The order of granting of a delay and installments of payment of the duty is established by the State customs service of Ukraine.

Classification of rates of the customs duties:
• Ad valorem - are charged in percentage to customs value of the assessed goods (for example, 20 % from customs value);
• Specific - are charged in the established size on unit of the assessed goods (for example, 10 dollars for 1 item);
• Combined - combine both kinds of customs taxation (for example, 20 % from customs value, but no more than 10 dollars for ton; or 20 % from customs value + 50 dollars).

Rates of the export customs duties are established by the Law of Ukraine from 7.05.96 N 180/96-ВР "On the export customs duties on live cattle, leather raw materials" and the Law of Ukraine from 10.09.99 N 1033-XIV "On rates of the export customs duties on seeds of some kinds of olive cultures". Introduction of the export customs duties on the specified kinds of the goods has prohibitive character in relation to export of these goods, as fiscal receipts from its introduction in this case the insignificant.

The import customs duties are differentiated:
• To the goods and other subjects which occur from the states entering together with Ukraine in the customs unions or from special customs areas, and in case of an establishment of any special preferential customs regime according to the international contracts with participation of Ukraine, the preferential rates of the import duty provided in UCTU are applied;
• To the goods and other subjects, occurring to the countries or the economic unions which use a most favoured nation treatment in Ukraine, the preferential rates of the import customs duties provided in UCTU are applied;
• To other goods and other subjects the full (general) rates of the import customs duties provided in UCTU are applied.


Change of rates of the import customs duties

By the law of Ukraine "On modification of the Decree the Cabinet of Ministers of Ukraine from January, 11th, 1993 "On Uniform custom duties of Ukraine" it is defined, that before legislative settlement On Uniform custom duties of Ukraine according to the Constitution of Ukraine and the Law of Ukraine "On taxation system" the Cabinet of Ministers of Ukraine has the right to change customs duties rates in relation to the goods and other subjects which move through customs border of Ukraine, except excisable goods (subjects) and the goods (subjects) in which relation of the rate of the customs duties are established by laws of Ukraine. Thus, it is forbidden to reduce rates of the customs duties for separate legal and physical persons and under separate contracts or to release them from payment of the customs duties and to transfer terms of its payment.

By the decision of the Cabinet of Ministers of Ukraine from 03.08.98 N 1213 "On an order of modification of rates of the import customs duties" it is defined, that drafts of legislation on customs questions - the tariff regulation, in particular concerning establishments, changes or cancellations of rates of the customs duties, are brought in the Cabinet of Ministers of Ukraine after their preliminary consideration and approval It is customs – is the Tariff Council of Ukraine. Also by the specified decision of the Cabinet of Ministers of Ukraine it is established, that decisions concerning modification of change of rates of the import customs duties on the goods (except for agricultural production on which the seasonal customs duties are established) are accepted by the Cabinet of Ministers of Ukraine not more often an once in a half-year, and since January, 1st, 2000 - once a year.


Types of the customs duties

The customs duties (customs duty) - the obligatory payment which is collected by customs bodies at import or export of the goods and being a condition of import or export.

According to article 6 of the Law of Ukraine from 5.02.92 N 2097-XII "On Uniform customs duties" the customs duties raised by customs, represent the tax to the goods and other subjects which move through customs border of Ukraine.

Kinds of the customs duties:

Import - the customs duties which are imposed on the import goods at their release for the free circulation in home market. It is prevailing form of duties applied by all countries of the world for protection of national manufacturers from a foreign competition.

According to article 8 of the Law of Ukraine from 5.02.92 N 2097-XII "On Uniform customs duties" the import duty is charged on the goods and other subjects at their import on customs territory of Ukraine.

The import customs duties are differentiated:
• To the goods and other subjects which occur from the states entering together with Ukraine in the customs unions or from special customs areas, and in case of an establishment of any special preferential customs regime according to the international contracts with participation of Ukraine, the preferential rates of the import duty provided in UCTU are applied;
• To the goods and other subjects, occurring to the countries or the economic unions which use a most favoured nation treatment in Ukraine, the preferential rates of the import customs duties provided in UCTU are applied;
• To other goods and other subjects the full (general) rates of the import customs duties provided in UCTU are applied.

Export - the customs duties which are imposed on the export goods at their release for limits of customs territory of the state. Such duties are applied rarely by the separate countries, usually in case of the big distinctions in level of internal controlled prices and free prices of the world market for the separate goods, and have for an object to reduce export and to fill up the budget.

According to article 9 of the Law of Ukraine from 5.02.92 N 2097-XII "On Uniform customs duties" the export customs duties are charged on the goods and other subjects at their export outside borders of customs territory of Ukraine.

Seasonal - the customs duties which are applied to operative regulation of international trade by seasonal nature production, first of all to agricultural commodity. Usually term of their action cannot exceed several months in a year, and for this period action of usual customs duties on these goods are not applied.

According to article 10 of the Law of Ukraine from 5.02.92 N 2097-XII "On Uniform customs duties" on the separate goods and other subjects seasonal import and the export duty can be established for term of no more than four months from the moment of their establishment.

Also article 2 of the Law of Ukraine from 17.07.97 N 468/97-ВР "On state regulation of import of agricultural production" defines the basic conditions of application of the seasonal (import) customs duties. In particular, it is established, that the seasonal import customs duties are entered annually in the doubled size to the size of preferential rates of the import customs duties on agricultural production of groups of the foreign trade activities. The seasonal customs duties are established for term which than 60 and more 120 consecutive calendar days cannot be less.


Special kinds of the customs duties

By article 11 of the Law of Ukraine from 5.02.92 N 2097-XII "On Uniform customs duties" it is provided, that for the purpose of protection of economic interests of Ukraine, the Ukrainian manufacturers and in the cases provided by laws of Ukraine, in case of import on customs territory of Ukraine and export for borders of this territory of the goods irrespective of other kinds of the duty special kinds of the duty can be applied:
• special (safeguard) duty;
• antidumping duty;
• countervailing duty.

Usually these special kinds of duties are applied by the country or unilaterally in protective purposes from attempts of an unfair competition from its trading partners, or as a reciprocal measure on discrimination and other actions infringing interests of the country, from other states and their unions. Introduction of special duties is preceded usually by the investigation made on the instructions of the government or parliament, concrete cases of abusing in the market from trading partners. In the course of investigation bilateral negotiations are carried on, positions are defined, possible explanations of the arisen situation are considered and other attempts to solve a disagreement politically, etc.

The special customs duties are applied:
• As a protection of Ukrainian manufacturers;
• As a protection of a national commodity producer in a case when the goods are imported on customs territory of Ukraine in volumes and (or) under such circumstances which do considerable harm or create threat of causing considerable harm to a national commodity producer;
• As a protection of participants of foreign trade activities who harm national interests in foreign trade activities;
• As actions in reply to discrimination and (or) unfriendly actions of other states, the customs unions and economic groups which limit realisation of legitimate rights and interests of subjects of foreign trade activities and (or) infringe interests of Ukraine.

Practical application of this kind of the customs duties is provided by the Law of Ukraine from 22.12.98 N 335-XIV "On application of special measures concerning import to Ukraine". Thus, the specified Law provides an establishment of the preliminary special customs duties as a preliminary special measure. At present the special customs duties are not applied.

The antidumping customs duties - duties which are applied in case of import on territory of the country of the goods at the price lower, than their normal price in the exporting country if such import causes a damage to local manufacturers of the similar goods or interferes with the organisation and expansion of national manufacture of such goods.

In Ukraine at present the antidumping duty is applied according to the Law of Ukraine from 22.12.98 N 330-XIV "On protection of a national commodity producer against dumping import" in case of import on customs territory of Ukraine of the goods which are object of the dumping, harming a national commodity producer.

The countervailing customs duties - the duties imposed for import of those goods, manufacture of which was made due to illegal subsidies and if their import causes a damage to national manufacturers of such goods.

The countervailing customs duties are applied according to the Law of Ukraine from 22.12.98 N 331-XIV "On protection of a national commodity producer against the subsidized import" in case of import on customs territory of Ukraine of the goods which are object of the subsidised import, harming a national commodity producer. At present this kind of the customs duties is not applied.