Many immediately started calculating how much a used car might cost in Europe, and already pictured themselves behind the wheel of a BMW or Mercedes in excellent condition, comparable in price to a new Lanos in Ukraine. However, is it worth believing the promises of the bill's authors about reducing excise taxes on imported used cars?
Yes, excise taxes are indeed being reduced significantly — from 2 to 28 times, depending on engine size and fuel type. For example, for a car with an engine up to 1.5 liters, you will now have to pay about 60 euros instead of the previous 1,700 euros. But before rejoicing, it is worth not just grabbing a calculator, but looking at real prices for used cars in Europe that are no older than 5-6 years. Only such cars meet the Euro-5 standard, which has been in effect in Ukraine since January 1, 2016.
“I don’t think that a massive flow of used cars from Europe will flood into Ukraine. Therefore, the supply at our car markets is unlikely to change much, and prices will remain at the current level,” says Oleh Nazarenko, head of the All-Ukrainian Association of Auto Importers and Dealers.
Why? — the reader will ask. Let’s figure it out. Let’s compare prices for “five-year-old” cars in Germany and here. Take a BMW 5 Series in the F10 body — a car that many Ukrainians can only dream of, although it was precisely for such dreams that the law was adopted. In Germany, such a car costs 15-20 thousand euros, in Ukraine — 25-30 thousand dollars. Importantly, the foreign price is not final, because when a non-resident exports the car, almost 20% VAT is refunded. Sounds good, right? Now let’s calculate (approximately, but for the overall picture):
15-20 thousand euros minus VAT refund = 12-16 thousand euros.
Customs clearance in Ukraine:
VAT (20%) — we give back those very “refunded” 3-4 thousand euros
Duty (10%) — 1.5-2 thousand euros
Pension fund fee (5%) — 750-1000 euros
Excise tax at reduced rates — about 500-600 euros
Total: 18-23 thousand euros, not counting the costs of the trip or delivery. An analogue in Ukraine can be found for 25-30 thousand dollars. It turns out that the benefit is not that big?
In fact, everything depends on the specific model and condition of the car. It is known that sometimes a car from a European taxi with a mileage of 400,000 km can turn out to be in better condition than a Ukrainian car with a mileage of 50,000 km (and it still needs to be determined whether that mileage is real). By the way, taxi cars are quite cheap, even if they are fresh in terms of year of manufacture. It is also worth remembering that in Europe it is not customary to hide a car’s history or repaint it — such cases happen, but they are rather the exception.
Summing up, we can say that the reduction of excise taxes indeed provides new opportunities for those who want to buy or change a car, and makes the purchase more profitable. But talking about a “freebie” is too optimistic.
