Parliament is discussing a monthly tax for electric vehicle owners

The Verkhovna Rada is once again discussing the taxation of electric vehicles — this time not import duties or VAT, but a regular monthly payment for EV owners. The idea has already sparked lively debate among drivers and businesses, as it could significantly change the economics of owning a “green” car and affect the entire e‑mobility market.

Essence of the initiative: what the new tax might look like
According to media reports, Parliament is considering a model of a monthly tax for electric‑vehicle owners, with the amount depending on the value of the car. MPs are talking about a differentiated rate: the more expensive the EV, the higher the potential payment.

Public comments mention indicative figures such as:

• an electric car worth about 30,000 USD — up to 4,000 UAH per month;
• cheaper cars should be taxed at a lower rate, but no detailed calculations have been published yet.

The possible format is either a fixed monthly payment or an annual amount paid in one instalment, which in practice still translates into a certain monthly rate. For now, this is only a political initiative: the draft law is still being prepared, and the final parameters may change after discussions in committees and with the government.

Why a tax on EVs is being discussed at all
The main argument of the proposal’s authors is to “level” the tax burden between owners of EVs and cars with internal combustion engines. MPs point out that:

• EV owners do not pay fuel excise and other charges embedded in the price of petrol and diesel;
• yet they use the same road infrastructure as other drivers while contributing less to the budget.

The initiative is also linked to the sharp increase in the number of EVs in Ukraine: the fleet has grown from around 20,000 to nearly 300,000 vehicles. Against the backdrop of wartime and post‑war expenditures, the state is looking for additional sources to finance roads and infrastructure, and the new payment is presented as a targeted tool for these needs.

At the same time, the broader context must be considered:

• tax incentives for the import and supply of EVs (exemption from VAT and import duty) remain in place until the end of 2025;
• from 1 January 2026, VAT on EV‑related transactions will return, making the import of such cars at least 20% more expensive on its own.

In other words, a potential monthly tax may come on top of already planned tightening of the tax regime for electric transport.

Possible implications for the market and owners

1. Higher cost of owning an EV
   For a mid‑range car, a tax of up to 4,000 UAH per month means up to 48,000 UAH in extra annual expenses. Combined with the return of VAT, this could:

• make EVs less attractive for new buyers;
• push some current owners to sell their vehicles or switch to cheaper models.

2. Slower “green” transition in transport
   EVs are seen as a key tool for decarbonisation and reducing dependence on imported fuel. Excessive tax pressure may contradict the goals of the “green” policies Ukraine has committed to, including within the EU integration framework. This is why many experts stress the need for a balance between budget needs and the incentive role of the tax system.
3. Uneven impact on different owner segments
   The initiative talks about differentiation based on the vehicle’s value, but it remains unclear how market value will be determined — by contract price, reference values, or valuation reports. There is a risk that:

• the “paper” value and the actual market value will differ;
• owners of older or damaged imported EVs may end up paying as much as owners of far more expensive cars if the methodology is vague.

4. Administrative risks and corruption factors
   Any new tax requires:

• clear rules for registering taxpayers and vehicles;
• a transparent mechanism for monitoring payments;
• well‑defined liability for non‑payment.

If the model is poorly designed, potential issues include:

• overlap with existing charges;
• disputes with tax authorities over the tax base;
• corruption risks when challenging assessments.

Why this is more than just an “auto issue” for business
The potential tax affects not only individuals but also companies actively switching to electric fleets: couriers, logistics providers, taxi services, and corporate fleets. For them, a monthly charge for each vehicle:

• will directly increase operating costs;
• may force a review of pricing and service margins;
• will become an important factor when planning fleet renewal.

Businesses also need clarity on:

• whether this tax will be deductible for corporate profit tax purposes;
• whether any preferential regimes will be available (for example, for critical infrastructure, medical or energy‑sector fleets).

There are no answers yet — they will depend on the final wording of the draft law.

What EV owners should do now

1. Monitor the publication of the draft law.
   So far, the public only knows the general approach and “headline numbers” from MPs’ interviews. Real legal consequences can be assessed only once the draft and the committee opinions are published.
2. Recalculate the economics of owning your car.
   If you planned to buy an EV in late 2025 or early 2026, you should reassess: the expected purchase price including the return of VAT; the potential monthly tax based on the announced ranges; and how all this compares with the total cost of owning a conventional car, including fuel and maintenance.
3. For businesses — model scenarios for the fleet.
   Companies should build several scenarios (no tax, low‑rate tax, high‑rate tax), estimate the impact on budgets, tariffs, and investment plans, and prepare for possible changes in leasing or financing terms.
4. Take part in professional discussions.
   Before the law is adopted, business associations, industry groups, and EV owners can still influence the initiative’s parameters through consultations, position papers, and participation in working groups. At this stage, it is still possible to push for softer rates, transition periods, or exemptions for specific vehicle categories.

In summary, a monthly tax on EVs is not just a technical tweak to the Tax Code but a potentially major shift in the rules of the game for the entire electric‑transport market and for those who have already invested in “green” cars.

If you have questions or concerns about a potential EV tax, planning an electric‑car purchase, or tax risks for your fleet, consult lawyers who specialise in tax law and the automotive sector.
Author: Ihor Yasko, Managing Partner of WINNER Law Firm, PhD in Law.