Law on Imposing Import Duty on Pharmaceuticals has been Adopted but has not yet Come Into Force

Draft law "On measures to stabilize the balance of payments of Ukraine in accordance with Article XII of the General Agreement on Tariffs and Trade 1994", about which Legal Alliance reported on December 23, 2014, has been adopted by the Verkhovna Rada and signed by the President, and become the Law of Ukraine.

Let us recall that the document suggests introducing additional customs duty on a wide range of goods, imported into the customs territory of Ukraine in the import regime, for a period of 12 months irrespective of the country of origin of the goods and free trade agreements concluded by Ukraine.

It is important that before the final vote of the legislature revised the date of entry into force of the law. So, instead of unconditional entry into force on 1 January 2015, the document envisages that the law will come into force only after the publication of the decision of the Cabinet of Ministers of Ukraine on the conclusion of consultations with international financial institutions. At the current moment it is difficult to predict when exactly such consultations will be completed, and what their result will be.

At the same time after the enactment of the law additional customs duties at rates of 5 and 10 percent will apply to the majority of imported goods. Among other things, the import of medicinal products and medical devices will be taxed at the rate of 5%, and dietary supplements – of 10%.

Goods classified as essential will be exempted from the tax. In addition to the energy industry goods and some other goods from customs duty will be exempted:

• Medical devices for hemodialysis and treatment of cancer patients according to the list established by the Cabinet of Ministers of Ukraine;
• Pharmaceutical products, compounds used for its production, which are not produced in Ukraine and are classified according to product groups 28, 29, 30 UKT VED, the list of which is approved by the Cabinet of Ministers of Ukraine: http://zakon4.rada.gov.ua/laws/show/1568-2004-%D0%BF/paran9#n9;
• Goods, paid by grants (sub-grants) provided in accordance with the Global Fund to Fight AIDS, Tuberculosis and Malaria in Ukraine;
• Humanitarian assistance;
• Goods imported into the customs territory of Ukraine to the Ukrainian Red Cross Society, its agencies and local organizations in humanitarian or charitable assistance;
• At the time of the anti-terrorist operation and / or the imposition of martial law – medicinal products and medical devices that are intended for use by health agencies and members of the antiterrorist operation to provide medical care to individuals whose health during the anti-terrorist operation and / or the imposition of martial law was harmed. Volumes of import of such goods shall be determined by the Cabinet of Ministers of Ukraine.