A new bill has been registered in the Verkhovna Rada, which, if adopted, will introduce the announced customs clearance of cars in a smartphone. How this procedure will work is in our material.
On December 26, 2023, a group of people’s deputies registered bill No. 10380 “Draft Law on Amendments to Section XXI “Final and Transitional Provisions” of the Customs Code of Ukraine and other laws of Ukraine regarding the specifics of customs declaration of passenger cars using the Unified State Web Portal of Electronic Services.”
The objective of the project, as stated in the explanatory note to it, is to simplify and speed up customs clearance of passenger cars, for which it is proposed to create the possibility of electronic declaration of such vehicles using the Unified web portal of electronic services (Portal “Diya”). The mobile application is also part of this web portal, therefore, we are talking about customs clearance in a smartphone, the idea of which has been discussed since 2021.
It should also be noted that the proposed mechanism is temporary and will be in effect until Ukraine gains membership status in the European Union.
It is important that both individuals and legal entities, as well as persons authorized by the declarant, can use it. That is, car dealerships that sell used cars will also be able to bring a car from abroad and clear it through customs using a smartphone, according to the Institute of Automotive Market Research.. You can bring the car not in person, but, for example, by proxy.
Opportunities are new, taxes are old
Unlike the previous bill, which did not receive sufficient support from people's deputies, the current one does not provide for any changes in customs clearance taxes. That is, the duty, excise tax and value added tax remain the same as they are now. Only the customs clearance mechanism is changing. At the same time, if changes in taxes happen in the future, this will not in any way affect the customs clearance of cars in “Diya”.
Other categories of vehicles – trucks, tractors, buses, trailers and semi-trailers, as well as special equipment and motor vehicles – will be processed according to the usual procedure.
New car rating mechanism
The main problem that the bill solves is leveling out the human factor when determining the customs value of a car. After all, it is from this that the amount of customs duties is calculated, and it is from this that the amount of customs clearance can be manipulated for corruption purposes.
Due to the introduction of customs clearance in Dii, the popular schemes that exist today will partially lose their benefits. For example, there will be no point in falsifying car purchase and sale agreements by indicating a low price, indicating non-existent damage and artificially increasing the car’s mileage. In the new system, these factors will not affect the amount of taxes you will need to pay.
People's deputies propose to evaluate cars automatically, based on the price of similar new cars, and reduce the price of a specific car, based on a table of coefficients.
To do this, the Cabinet of Ministers must create a Database of the customs value of passenger cars, the holder of which will be the Ministry of Digital Development, and the technical administrator will be a state enterprise, which will be determined by the Cabinet of Ministers.
Since this Database does not currently exist, it is impossible to make any calculations on the probable customs value of cars, and in general many questions arise regarding its filling.
The main points that experts from the Institute of Automotive Market Research pay attention to:
it is not clear what exact prices of new cars will be taken as a basis: will it be the customs value when imported into Ukraine (before taxes), or the customs value already taking into account taxes, or the selling price from the dealer’s price list; it is not clearly defined which country's price will be used to determine the cost of a new car, and how to determine the cost for models of the same name, which are sold with a significant difference in price in different markets. For example, the price of Volkswagen ID.4 in Germany starts at $46,000, and in China it costs half as much. it is not known where to get prices for new cars if the desired model was not imported new by official importers to Ukraine, and there are quite a lot of such cars. As of today, cars are imported into Ukraine from the EU (about 60%), America (about 25%), North Korea, China and other countries. A significant part of them were manufactured specifically for local markets.. it is not clear how to determine the objective cost for models that do not have standardized configurations, and each car is made to order (for example, Tesla). Also, customs clearance “in a new way” is unlikely to suit importers of auction cars from the USA, who have a clear price indicated in the accompanying documents, which may be several times less than that determined from the coefficient table. And although now the electric cars given here as an example have the so-called “zero customs clearance”, over time it will cease to be so, and even with it it is necessary to indicate the estimated value of any car, regardless of customs clearance benefits.
Only two documents for customs
To import a passenger car, the declarant must provide a registration document for the car (if available), and a document of ownership – a sales contract or an invoice, if the car is not registered to someone who wants to clear it through customs.
At the same time, the draft law prohibits requiring from the declarant or his authorized person any other documents other than those specified in this paragraph.
You also do not need a document to deregister the car in the country of departure.
That is, in order to clear a car through customs on a smartphone, only one or two documents will be enough.
Comprehensive list of information for customs
When clearing a car through customs using Dii, you only need to provide basic data. They will be enough for customs clearance:
1) information about the declarant;
2) information about the person responsible for the financial settlement;
3) financial and banking data (in case of filing a declaration by the enterprise);
4) information about the car:
product code according to UKT VED; Year of manufacture; brand; commercial description (model); identification number (VIN); fuel type or energy source; engine capacity; name of country of origin; name of the country of departure; invoice value. In this case, the declarant will receive a written notification of the application of such an adjustment, and the assessment procedure will take place “as before,” that is, according to the current system for determining customs value.
How can customs clearance in “Diya” affect the car market?
According to experts from the Institute of Automotive Market Research, the described initiative opens up new opportunities for the import of passenger cars, in particular by citizens themselves, and a reduction in the bureaucratic burden on importers – legal entities. Transferring a significant number of stages of customs clearance to remote electronic form reduces corruption risks. Clear lists of documents and data required for customs clearance also help reduce corruption risks.
At the same time, there are questions regarding the construction of the Customs Value Database. There are hundreds of variations of generations and modifications of passenger cars on the market, special configurations, as well as versions for various markets.. How well it will be possible to fill this Base, as well as in what time, will only be seen in practice.
Regarding the import of used cars from American countries, it is obvious that the assessment of auction cars on the scale of new ones is unlikely to correspond to reality and the expectations of declarants. Accordingly, this mechanism will most likely be used only (or predominantly) for cars from Europe (about 60% of imports). Customs clearance of cars from American countries will probably take place according to the rules that are in effect now.
The project concerns only an exhaustive list of passenger cars; simplified customs clearance options have not yet been proposed for all other types of vehicles.
Considering the need for considerable preparatory work (creation of a Database of customs value of cars, relevant sections on the Diya Portal, electronic communications between departments involved in customs clearance), the time for the physical implementation of such a mechanism can be about a year or more.
Regarding the chances of bill No. 10380 becoming a law, they are quite high, taking into account the list of authors, as well as the support promised at the recent Diia.Summit event for the introduction of “customs clearance in Diia” from state leaders.