Ukrainians register 65,000 cars imported with EU license plates, pay $145 million in fees, fines

Ukrainian car-owners have registered 65,000 imported cars with European Union, license numbers, paying Hr 4.1 billion, or some $145 million, to the budget since Nov. 25, 2018, when new rules on customs clearance were introduced, State Fiscal Service of Ukraine (SFS) reported on Feb. 1.

Previously, Ukrainians drivers could exploit a loophole in the law that allowed them to avoid paying customs fees on imported cars if they remained registered in the European Union.

However, amid protests from car owners, parliament on Nov. 8 closed that loophole, forcing the owners of EU-registered cars to clear their vehicles with customs and re-register them.

The speed of registration of such cars is impressive – in just day, on Jan. 31, citizens registered almost 3,400 cars, paying $7.5 million to the budget.

Almost 85 percent of the EU-registered cars in Ukraine were in violation of customs legislation. Their owners also had to pay Hr 8,500, or $300, in fines for each car, which raised almost $17 million for the budget.

Most of the cars were re-registered in Kyiv (10,008 cars), Volyn Oblast (8,700) and Chernivtsi Oblast (more then 6,000), the SFS report says.

There has been a rush to re-register the cars because the 90-day term to qualify for a reduced excise rate (50 percent less) for the customs clearance of cars with foreign license plates expires on Feb. 22.

After that deadline, car owners will have to pay excise tax at the full rate. Moreover, this May tough financial sanctions will also come into force, including the possible confiscation of vehicles. The maximum fine could be up to Hr 170,000, or some $6,000.

Before the laws on the legalization of cars imported from Europe were approved by the Verkhovna Rada on Nov. 8, the high custom clearance fees charged on imported car prompted angry protests from the owners of such vehicles.

And protests might flare up again this month, as the tariffs on the customs clearance of used European cars are still very high, according to Oleh Yaroshevych, head of AutoEuroSila, a civic organization of car owners with European numbers.

“Today, the cost of customs clearance is around 120 to 200 percent of the actual value of the car. These people (the government) are simply mocking us – they are collecting money today for the elections,” said Yaroshevych on Jan. 23 in a post on Facebook.

However, Nina Yuzhanina, the head of the parliamentary committee for tax and customs policy, said there would be no changes made to the law to placate the activists.

“Those who want to carry out the customs clearance of their cars in the time established by law, will have the time to do it. There will be no negotiations about the extension, postponement or changing of these terms,” said Yuzhanina, the motoring website Autoconsulting.com reported on Jan. 29.