Taxes when selling a car in 2026: how much do you need to pay and in what cases

Taxes on selling a car in 2026 depend on three factors: the type of vehicle, the number of sales during the calendar year, and the method of transferring the property. Because of this, two deals that look similar at first glance can have different tax consequences. For passenger cars, motorcycles, and mopeds, the first sale during the year may be taxed at a zero rate, whereas this relief does not apply to trucks, buses, trailers, or special-purpose vehicles.

In 2026, when determining exactly which tax on a car sale you have to pay, you need to take into account not only personal income tax (PIT), but also the military levy. What matters here is not just the fact of the sale, but also whether the transaction is the first, second, third, or a subsequent one during the year. That's why it is impossible to answer the question of which tax must be paid when selling a car in Ukraine without analyzing the specific situation.

Special attention should be given to the cases that most often lead to mistakes during re-registration: the second sale of a car within a year, a sale under a general power of attorney, an exchange of vehicles, determining the tax base, and completing the deal through the Ministry of Internal Affairs (MIA) service center. In this article, we'll go through when a tax on a car sale arises, who pays it, how to correctly determine the rate, and in which cases the law allows you not to pay tax at all.

The tax on a car sale in 2026 depends on the type of vehicle and the number of sales during the calendar year:

• the first sale of a passenger car, motorcycle, or moped — 0%;
• the second sale of a car within a year — 5% PIT + 5% military levy;
• the third and each subsequent sale of passenger transport — 18% PIT + 5% military levy;

The first and second sale of a truck, bus, trailer, or special-purpose vehicle — 5% PIT and 5% military levy. The third and each subsequent sale of such a vehicle — 18% PIT and 5% military levy.

The taxation of vehicle sales by individuals is governed by Article 173 of the Tax Code of Ukraine.

Which taxes are paid when selling a car in Ukraine in 2026

For individuals, the tax consequences of selling a vehicle depend on three factors: the vehicle category, the number of transactions during the calendar year, and the type of property transfer. It is the combination of these conditions that determines whether an obligation to pay PIT and the military levy arises.

Who pays the tax when selling a car: the seller or the buyer

The taxpayer when selling a vehicle is the person who receives income from transferring the property. The seller receives income from the sale or exchange of the vehicle, so the tax obligation arises for them. If a tax on the car sale arises during the deal, it is paid by the seller, not the buyer. This rule applies both to personal income tax and to the military levy.

The MIA service center or a notary handles the transfer of ownership and checks the documents needed to complete the deal. However, the obligation to pay taxes remains with the seller and does not pass to the body or official who processes the contract.

Do you have to pay tax when buying a car

The buyer does not pay tax when a car is sold; however, certain payments may arise when acquiring a vehicle. The most common example is the mandatory state pension insurance levy on the first state registration of a passenger car in Ukraine. Because of this pension levy, it is often mistakenly assumed that the buyer also pays tax when a car is sold. In reality, these are different payments with a different legal nature. The pension levy is tied to the state registration of the vehicle, not to receiving income from its sale.

Who pays the tax if the car is joint property of a married couple

A car may be in the joint co-ownership of a married couple; however, for tax purposes, what matters is which spouse acts as the seller under the sale-and-purchase contract. It is with respect to that spouse that the tax consequences of the transaction are determined and, where grounds exist, the obligation to pay PIT and the military levy arises. So the tax is paid not by the couple as a whole, but by the seller who receives income from selling the vehicle.

In short, the answer to the question of who pays the tax when selling a car is this: PIT and the military levy are paid by the seller of the vehicle who receives income from its sale or exchange. The buyer may pay only certain registration fees, which are not taxes on the sale of a car.

First, second, and third sale of a car: how to correctly determine the order of transactions

When determining exactly which tax on a car sale you have to pay, the decisive factor is not the total number of vehicles a person has sold in their lifetime, but the number of relevant transactions during a single calendar year. For tax purposes, the count starts on January 1 and ends on December 31 of each year.

For example, if an owner sold a passenger car in December 2026 and the next one in January 2027, the second deal will no longer be considered a second sale. For the new calendar year, the count starts over, and the transaction is again treated as the first in the relevant category of vehicles.

It's important to keep in mind that the law takes into account not only the sale but also the exchange of vehicles. If, during the year, the owner first exchanged a car and then sold another one, both deals will be counted when determining the order of transactions.

Why selling a car doesn't cancel the relief for a motorcycle or moped

For tax purposes, a passenger car, a motorcycle, and a moped are not combined into a single category. The preferential regime applies separately to:

• one passenger car;
• one motorcycle;
• one moped.

Because of this, within a single calendar year an individual can sell or exchange one passenger car, one motorcycle, and one moped, and each of these transactions will be considered within its own category of vehicles.

What amount to state in the sale-and-purchase contract and what value the tax is calculated from

A common mistake is to assume that the tax on a car sale is always calculated from the amount stated in the contract. In reality, for tax purposes, what matters is not only the contract price, but also the average-market or market (appraised) value of the vehicle.

For passenger cars, motorcycles, and mopeds, income is determined based on the contract price, but not lower than the average-market or market (appraised) value — at the taxpayer's choice. Note that the tax on a car sale is not always calculated from the amount the parties decided to state in the contract.

Can you understate the value of the car in the contract

Understating the price in the contract itself does not guarantee a lower tax. If the contract value is lower than the average-market value or the market value determined by an appraiser, the tax base may become the higher of the figures. So an attempt to artificially reduce the price does not always affect the amount of tax and often becomes the reason for a mistaken calculation of tax liabilities.

Who pays the military levy when selling a car, and when

As of 2026, the military levy does not arise on every sale of a vehicle. If a transaction is exempt from taxation, the military levy is not charged either. But if a sale or exchange is subject to taxation, the levy is paid together with PIT.

For most individuals, the military levy rate is 5%. The base for its calculation is determined under the same rules as the base for PIT — that is, it depends on the value of the vehicle used for tax purposes.

A special note for military personnel

In its clarifications, the Main Service Center of the MIA specifically notes that a military levy rate of 1.5% applies to military personnel, whereas a rate of 5% applies to most other individuals.

Examples of calculating the tax when selling a car in 2026

To understand how much tax you'll have to pay, let's look at a few typical situations for 2026. The examples use a notional tax base of UAH 500,000.

The examples above do not account for possible differences between the contract, average-market, and appraised value of the vehicle, which may affect the actual tax base.

Even if a car was bought for $20,000 and sold for $15,000, on the second or a subsequent sale during the year an obligation arises to pay PIT and the military levy. The fact of selling at a loss does not, in itself, exempt you from taxation.

Example No. 1. Sale through a general power of attorney

If the car is sold by a representative under a power of attorney, the order of taxation does not change. The tax is determined with respect to the owner of the vehicle, not the person who signs the documents on their behalf.

Example No. 2. Exchange of a car

If, in April, the owner exchanged a passenger car and, in September, sold another, then for tax purposes the September deal will be counted as the second transaction during the year. The reason is that, when determining the order of transactions, not only sales but also exchanges of vehicles are taken into account.

Example No. 3. Why selling a car doesn't always mean losing the relief

If a passenger car is sold in March and a motorcycle in August, these transactions are counted separately. For tax purposes, a passenger car, a motorcycle, and a moped belong to different categories of vehicles. That's exactly why selling a car does not, in itself, automatically mean losing the relief for a motorcycle or moped.

FAQ

Do you have to file a declaration after selling a car?

If PIT and the military levy were paid when completing the sale-and-purchase contract, the income from such a transaction does not need to be declared separately. At the same time, a declaration may be filed on other grounds provided for by the Tax Code of Ukraine.

What should you do if the car is sold through the MIA service center?

Before re-registering the vehicle, you need to determine whether the transaction is subject to taxation. If an obligation to pay PIT and the military levy arises, the taxes are paid before the registration procedure is completed. The document confirming payment of taxes is submitted together with the other documents for re-registering the vehicle. If payment of taxes is mandatory, it is impossible to complete the deal without confirmation of such a payment.

In 2026, individuals can carry out certain vehicle re-registration operations through the Diia app, subject to the terms of the MIA service. The details for paying income tax and the military levy are provided when completing the deal through the MIA service center.

Can you legally avoid paying tax when selling a car?

Yes, if for a specific transaction the Tax Code of Ukraine sets a zero tax rate. As of 2026, no tax is paid on the first sale or exchange during the calendar year of one passenger car, one motorcycle, or one moped. For trucks, buses, trailers, semi-trailers, special-purpose vehicles, and most other vehicles, this relief does not apply. At the same time, a sale under a power of attorney without changing the owner in the documents, artificially understating the value of the vehicle in the contract, or handing over a car without proper re-registration are not lawful ways of avoiding taxation.

Is an exchange of a car considered a sale for tax purposes?

Yes. For the purposes of Article 173 of the Tax Code of Ukraine, an exchange of a vehicle is treated as its sale. That's exactly why an exchange is counted when determining the first, second, or subsequent transaction during the calendar year. If the owner first exchanged a car and then sold another vehicle, both transactions will be taken into account when determining the order of sales and applying the relevant tax rates. This rule applies even in cases where, during the exchange, the owner did not actually receive any money.

What value is the tax actually calculated from: contract, average-market, or appraised?

For buses, trucks, trailers, semi-trailers, and other vehicles, the seller's income is determined based on the price stated in the sale-and-purchase contract, but not lower than the average-market value or the market value determined by an appraisal entity — at the taxpayer's choice. That's exactly why the tax is not always calculated from the amount the parties stated in the contract.

Do these rules apply to legal entities?

No. This article covers the taxation of vehicle sales by individuals. For companies and other legal entities, different rules apply for determining income, expenses, and tax liabilities, so the 0%, 5%, and 18% rates do not automatically apply to a car sale by a company.