December 2017 – On 7 December 2017 the Ukrainian parliament voted to approve legislation (Draft Law No. 7280 “On The Amendment to the Law of Ukraine 1796-VIII ”) to extend the exemption from import duties (including VAT) for certain foreign-made aircraft to 1 January 2021. The law relates specifically to 44–110 seat aircraft that are flown by Ukrainian airlines under operating dry leases. Prior to the adoption of the draft law, the above-mentioned exemption was only valid until 1 January 2018.
In 2016, the Ukrainian government initiated a set of measures to support the domestic aircraft construction industry. The Law of Ukraine No.1796-VIII “On the Amendment to the Customs Code and to the Law of Ukraine On the Development of the Aircraft Construction Industry” prolonged the VAT-free import regime for goods used in the development, construction and repair of aircraft until 1 January 2025 and extended the list of such goods. At the same time, it imposed import duties on foreign-manufactured aircraft with operational empty weight of 10–30 tons and seating capacity of 44–110 seats starting from 1 January 2018.
This was a clear move to support national manufacturer Antonov, whose An-140, An-148 and An-158 aircraft fit into this category. The measure was highly debated inside the Ukrainian aviation community and was fiercely opposed by the current operators of Embraer E190 and ERJ145 aircraft – Ukraine International Airlines and Dniproavia. As a result, Draft Law No. 6538 aimed to delay imposition of duties until 2023, but was rejected by parliament on 9 November 2017.
This second attempt of the carriers to postpone the imposition of import duties on foreign-made regional aircraft has proven to be more successful.
Kinstellar continues to monitor the situation regarding import duties on foreign-made aircraft in Ukraine. We will advise you of any developments.
In case of any questions, please contact Oleksiy Burchevskyy, Knowledge Lawyer in Kyiv, at .