Ukraine State Tax Service Issues Notice on 7% VAT Rate and Excise Tax Exemption for Fuels

The State Tax Service (STS) of Ukraine has issued a notice on the reduction of the VAT rate on fuel and oil during the martial law period. This includes that the 7% VAT rate applies on imports and supplies in Ukraine of the following:

• Gasoline, heavy distillates (heavy fuel oil), and liquefied gas; and
• Crude oil and oil products obtained from bituminous minerals.

The 7% VAT rate applies regardless of when such fuel and oil products were purchased, i.e., before or after the introduction of the 7% rate. The notice also explains that where there is an excess input tax credit arising from the application of a higher rate (20%) on inputs and sales at 7%, the credit will not be refunded but can be carried forward for offset in future periods.

In addition to the reduced VAT rate, the notice also explains the exemption from excise tax on fuels sales. This includes that the excise tax rate is set to 0.00 per 1,000 liters during the martial law period for imports and domestic supplies of gasoline, heavy distillates (heavy fuel oil), and liquefied gas. Where excise tax was paid up to the effective date of the law providing the exemption, 17 March 2022, reimbursement is “currently envisaged”.

Source Orbitax

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