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Vira Shepeliuk
Ph.D. (Economics), Associate ProfessorDepartment of Accounting,Taxation,Public Administration

and Administration,Kryvyi Rih National UniversityKryvyi Rih, Ukraine;
e-mail: [email protected]
ORCID ID: https://orcid.org/0000-0001-6270-5936
Tetiana Protsiv,
Student of specialty 071 "Accounting and Taxation",Kryvyi Rih National University,
Kryvyi Rih, Ukraine
e-mail: [email protected]
MANAGERIAL ASPECTS OF PRODUCT CLASSIFICATION FOR ACCOUNTING AND

TAXATION
Annotation
The relevance of the study stems from the importance of product classification in ensuring
accurate accounting and proper taxation, which are key aspects of effective business management.
The purpose of this paper is to analyze the managerial aspects of product classification, taking into
account the requirements of modern legislation and tax regulations. The object of the study is the
processes of product classification in accounting and taxation systems. The study employs methods
of systems analysis, synthesis, comparison of regulatory documents, and practical case studies. The
results indicate that proper product classification reduces tax compliance risks and optimizes
management processes. The practical significance lies in the development of recommendations for
enterprises to improve product classification procedures.
Accurate product classification is a critical component of accounting and taxation processes.

Errors in classification can lead to fines, additional tax assessments, or the loss of tax benefits. At
the same time, current legislation imposes clear requirements for the identification of goods, which
requires significant managerial efforts from enterprises to properly comply with these standards.
However, many companies face challenges due to the complexity of regulatory documents and the
insufficient integration of accounting and tax systems.
Product classification involves several essential stages: collecting information about
products, systematic organization of products according to the codes of the Ukrainian Classification
of Goods for Foreign Economic Activity (UCGFEA), ensuring compliance with tax law
requirements, and integrating this data into internal accounting systems. The study demonstrates
that using modern information systems for product classification can significantly simplify this
process. Automated solutions, in particular, can identify errors and inconsistencies in data, thus
reducing tax risks. Additionally, training personnel responsible for classification is crucial to
minimizing subjective errors. The constantly evolving regulatory framework demands managerial
flexibility in decision-making.
Product classification plays a central role in taxation systems, as the economic nature and
characteristics of goods determine accounting procedures, tax assessment mechanisms, and
regulatory measures for the state's economic activities. In modern conditions, the state applies
various types of taxes based on product characteristics, value, origin, and consumption type.
Tax Classification.Value-Added Tax (VAT): VAT is one of the most common taxation tools
applied to goods. It is calculated not on the total value but on the added value at each stage of
production and sale. Excise Taxes: These are applied to specific categories of goods, such as
alcohol, tobacco, and fuel, and aim to regulate consumption volumes and increase fiscal revenues.
Customs Duties: These are taxes imposed on goods crossing the customs border, serving functions
such as protecting domestic markets and regulating import volumes.
Classification by Origin.Domestic Goods: Goods produced within the country are taxed
according to national tax legislation, including indirect taxes like VAT and excise taxes, as well as
direct taxes related to revenue from sales.
Imported Goods: These are subject to a special taxation regime involving customs duties and
additional fees, aimed at stimulating domestic production and limiting imports.
Classification by Social Importance. Essential Goods: These often benefit from tax
incentives or reduced tax rates to ensure affordability for the population.Excise Goods: High tax
rates on socially or economically significant goods, such as alcohol or tobacco, aim to reduce their
consumption and increase budget revenues.
Impact of Product Classification on Economic Policy.Product classification enables the state
to effectively manage tax rates and regulate tax revenues. This ensures a balance between fiscal
functions and economic equity. Through a differentiated approach to taxation, the state can
stimulate specific economic sectors, for example, by reducing tax burdens on innovative or
environmentally friendly products. High import taxes help protect domestic producers from foreign
competition while encouraging domestic production.
Product classification is a vital component of taxation, serving as a key object of fiscal
policy. Various types of taxes, such as VAT, excise taxes, customs duties, and others, rely on
classification criteria, including product origin, consumption type, and social importance. Proper
classification allows the state to implement effective fiscal and economic policies, ensuring stable
tax revenues and fostering national economic development.
The research emphasizes that effective management of product classification processes is an
important tool for enhancing the competitiveness of enterprises. Accurate classification ensures
compliance with legislative standards, minimizes financial risks, and optimizes managerial
processes. Implementing automated product classification systems and improving staff
qualifications are critical areas for process improvement. In the future, integrating international
classification standards will be essential to simplify the foreign economic activities of Ukrainian
enterprises.
Keywords
accounting; taxation; management; Ukrainian enterprises

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Vira Shepeliuk

Ph.D. (Economics), Associate ProfessorDepartment of Accounting,Taxation,Public Administration

MANAGERIAL ASPECTS OF PRODUCT CLASSIFICATION FOR ACCOUNTING AND

Accurate product classification is a critical component of accounting and taxation processes.

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