The Ukrainian Parliament is developing new tax regulations that could significantly impact car owners. In particular, there are plans to raise the personal income tax (PIT) rate to 18% for the sale of vehicles that have been owned for less than 183 days.
Changes in Car Resale Taxation
According to the new proposals, if a vehicle has been owned for less than 183 days, the income from its sale will be taxed at the rate established by paragraph 167.1 of the Tax Code of Ukraine. This rule will apply to both the first and second sale within the year. For the third and subsequent sales, the 18% rate will also be applied.
Changes in Tax Invoices
Additionally, the new rules stipulate that when supplying a vehicle, the identification number — VIN-code — must be indicated in tax invoices. These changes will come into effect on January 1, 2027.
Current Tax Rates
Currently, the first sale of a passenger car, motorcycle, or moped within the calendar year is not subject to PIT. For the second sale, a 5% PIT must be paid, while for the third and each subsequent sale, the rate increases to 18%. A military tax of 5% is also applied to taxable transactions.