Buying a car in Ukraine: why you'll now have to pay more?

With recent changes to Ukrainian legislation, the process of buying a car has become significantly more complicated. The new regulation requires the submission of a certificate stating the car’s actual value when drawing up a sales contract, with the aim of increasing tax revenue for the state budget. This was reported by the press service of the Ministry of Internal Affairs of Ukraine.

According to a resolution of the Cabinet of Ministers that took effect on October 1, every buyer must now confirm the actual value of the vehicle. This measure is intended to combat tax schemes in which the price of a vehicle is often set significantly below its market value.

It should be noted that the sale of more than two passenger cars per year is subject to tax: a 5% tax is levied on the second car sold, and 18% on the third and all subsequent cars. It is worth noting that the sale of one passenger car per year is not subject to taxation. At the same time, the sale of the first truck is also subject to a 5% tax, while the rate for subsequent trucks will be 18%.

As the Ministry of Internal Affairs points out, unscrupulous sellers often underreport a vehicle’s value to avoid paying taxes. For example, there was a reported case where a 2022 Tesla Model 3 was valued at 10,000 hryvnias, while its actual market value is 917,083 hryvnias, according to Bogdan Drapyaty, Deputy Head of the Ministry of Internal Affairs.

Thus, changes in the law are altering the rules of the game in Ukraine’s car market. Be sure to take these changes into account when buying a car to avoid unpleasant surprises.