In Ukraine may be introduced a new tax levy for operations of import of many goods, including pharmaceutical products

On December, 22 due to the need of prompt response from state about the current negative payment balance of Ukraine, significant reduction in gold and forex reserves of the National Bank, and the need to increase revenues to the State Budget of Ukraine in the parliament two drafts were registered: “On Amendments to the Customs Code of Ukraine (concerning stabilization of payment balance)” (№ 1563) and “On measures to stabilize the payment balance of Ukraine in accordance with Article XII of the General Agreement on Tariffs and trade 1994” (№ 1562).

Temporarily, for a period of 12 months, it is proposed to establish an additional tax levy on goods imported into the customs territory of Ukraine under the customs regime of import irrespective of the country of origin of the goods and concluded free trade agreements by Ukraine.

Thus, operations on the import of medicinal products and medical devices from 01.01.2015 may be taxed at the rate of 5%, and dietary supplements - 10%.

In addition, such goods can include goods specified in the first and second paragraph of Article 277 of the Customs Code of Ukraine, according to which the objects of taxation are:

1. goods, customs value of which exceeds the equivalent of 150 euros, imported by enterprises;
2. goods imported (sent) into the customs territory of Ukraine in the volume, which is taxable by customs payments in accordance with Chapter XII of Customs Code (citizens for personal, family and other purposes not related to business activities), as well as sections V (VAT) and VI of the Tax Code of Ukraine (excise tax);
3. goods, vehicles for commercial use, stored in warehouses of incomes and taxes, for which the owner or authorized person did not address until the expiration of time for storage.

Operations on the import of goods by citizens are planned to tax by fee at the rate of 10%. However, the wording applied in the draft, by comparison with the standards of the Customs Code of Ukraine, does not allow quite unequivocally say exactly what good are subject of such taxation.

Imposing additional import fee will be provided regardless of the imposing of other taxes and fees on the import of goods into the customs territory of Ukraine goods. Basis for imposing will be the customs value of goods.

It is supposed that the exception on the obligation of paying additional fee does not cover operations on import of essential goods, such as:

• humanitarian aid;
• goods, paid by grants (sub-grants) provided in accordance with the Global Fund to Fight AIDS, Tuberculosis and Malaria in Ukraine;
• goods imported into the customs territory of Ukraine to the Ukrainian Red Cross Society;
• other goods.

Speaking about the reasonability of the draft and its perspectives, it should be noted that its initiator aims to reduce the negative payment balance of Ukraine. At the same time, the memorandum to the draft does not provide a mathematical justification of the rates of customs duty, and does not indicate how is supposed to change the trade balance for noted period. In general, it can lead to conflicts with commitments of Ukraine under the World Trade Organisation - currently there is no grounds to suggest that the measures, proposed by the Government, do not exceed the permissible necessary measures.