In Ukraine, the taxation procedure for income derived from the sale or exchange of vehicles is defined by Article 173 of the Tax Code of Ukraine. The system provides for different tax rates depending on the number of transactions conducted by an individual within a calendar year.
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Taxation Features for the First and Second Sale of a Car
If a citizen sells or exchanges only one passenger car, motorcycle, or moped within a year, such income is not subject to tax. Moreover, if the taxpayer has no other income that is subject to mandatory declaration, there is no need to submit an annual tax declaration on property status and income.
However, when conducting the second transaction for the sale or exchange of a vehicle within the year, the income received is already subject to taxation at a rate of 5% personal income tax. Additionally, for the second and each subsequent transaction, an additional 5% military levy is charged.
Taxes on the Third and Subsequent Transactions
From the third sale or exchange of a vehicle in one calendar year, the amount of income is taxed at a significantly higher rate. For such transactions, an 18% personal income tax plus 5% military levy is applied, which can total up to 23% of the transaction amount.
“The tax base is the income determined based on the price specified in the purchase-sale (exchange) agreement. At the same time, such price cannot be lower than the average market value of the respective vehicle or its estimated market value (at the taxpayer’s choice).”
It is worth noting that during 2025, Ukrainians concluded about 896 thousand transactions for the purchase and sale of used passenger cars, which is 18.9% less than the previous year. The most popular brand among buyers was Volkswagen.