Bad news for drivers and 'resellers': used cars will sharply increase in price due to new taxes.

Changes in the taxation system may lead to an increase in the cost of used cars in Ukraine

Starting from December 1, 2024, new rules for the taxation of car sales come into effect in Ukraine, which may result in an increase in prices by 10-23% by 2025. According to the updated Tax Code, individuals selling cars will now have to pay personal income tax (PIT) and military tax. The amount of these taxes depends on the number of transactions a person enters into during the year and the type of vehicle.

The new rules stipulate that passenger cars, mopeds, and motorcycles will not be taxed up to a certain number of transactions per year. After the first transaction, 5% PIT and 5% military tax will be paid, and from the third and subsequent transactions - 18% PIT and 5% military tax. For trucks, trailers, and other movable property, taxes will be charged from the first transaction: 5% PIT and 5% military tax for the first and second operations, and 18% PIT and 5% military tax from the third and subsequent transactions.

'If during the year the owner sold a 'Karpaty' moped and a 'Lexus' car, and the moped was the first, then for the car he will have to pay 5% of income tax and 5% of military tax on the value of the car' - explained tax consultant Oleksandr Zaraisky.

These changes will particularly affect resellers who engage in the resale of used cars from Europe and the USA. They will be forced to pass on additional costs to buyers, which will lead to a general increase in prices in the market.

According to the Institute of Market Research, the average price of used gasoline cars in March 2025 has already increased by 3.4% compared to the previous year and now stands at 6,000 US dollars.

Changes in the taxation system may also create problems for individuals using powers of attorney to sell cars. Although the transfer of a car for use 'by power of attorney' is not taxed, when a car is sold by a user under a power of attorney, tax obligations will arise for the legal owner.

'Recently, there have been many cases where cars that were once 'sold' under a power of attorney were finally officially registered to new owners' - noted Oleksandr Zaraisky.

Experts recommend carefully planning the sale of a car to avoid several transactions per year and additional tax obligations. It is also important to remember that selling a car under a power of attorney is not a legal way to transfer ownership, and this may lead to significant tax liabilities for the legal owner.

Let’s also remind that drivers can now replace their technical passport online thanks to the new service in the 'Diia' app.

Analysis:

Changes in the taxation system in the used car market in Ukraine may lead to price increases of 10-23% by 2025. The new tax rules provide for the payment of personal income tax (PIT) and military tax upon the sale of cars. The cost of taxation depends on the number of transactions throughout the year and the type of vehicle. These changes will particularly impact resellers engaged in the resale of cars from Europe and the USA. The changes may also create problems for individuals using powers of attorney to sell cars. Experts recommend planning car sales, avoiding multiple transactions per year, and remembering that selling a car through a power of attorney can lead to tax liabilities for the legal owner.