Land payments in Ukraine

According  to  article  14,  item  14.1.147 of  the Tax Code of Ukraine (hereinafter referred to as ‘the Tax Code’) land payment is the state tax, collected in a form of the land tax and lease payment for state and municipal land.

Therefore, the  land payment comprises of the concepts of  land  tax and lease payment.

Land tax is an obligatory payment, collected from ground areas and land shares owners, and also permanent land users.

The payers of land tax are the following:

• ground areas and land shares owners;
• land users.

The object of taxation is:

• owned and in use ground areas;
• owned land shares.

The bases for taxation are the following:

• normative  pecuniary  valuation  of  ground  areas,  taking  into consideration an  indexation coefficient, determined according  to  the rules, provided by this chapter;
• land area whose normative pecuniary valuation is not conducted.

Land payment  shall be  calculated  according  to  the  interest  rate,  taking into  consideration  the  land  category,  its normative pecuniary valuation  and other criteria, determined in the chapter ХІІІ of the Tax Code.

How to calculate land tax in 2020?

The ground of land tax charge is data of the state land cadastre.

Corresponding central executive authorities on the issues of land resources and  state  registration  of  interests  in  immovable  property  every month,  but not  later than the 10th day of next month, and, moreover, on request of the corresponding State Tax Service at the place of a ground area  location  shall submit information needed for calculation and collection of land payment.

Land  payment  payers  (except  for  natural  persons)  shall  independently calculate the tax amount every year as of the 1st of January, and not later than the 20th of February of a current year shall submit to the corresponding State Tax Service authority at the place of a ground area location the tax declaration for a current year with a breakdown of a yearly amount  into equal monthly parts. Submission of  the aforementioned declaration  shall dispense  from an obligation  to  submit monthly declaration. At  the  time of  submission of  the first declaration (actual commencement of activity as  land payment payer) a reference (extract) of normative pecuniary valuation of a ground area shall be also submitted; subsequently such a reference shall be submitted in the case a normative pecuniary valuation is approved.

The land payment payer is entitled to submit a new report tax declaration which shall dispense the payer from an obligation to submit the tax declaration not later than the 20th of February of a current year, during 20 calendar days of a month following the reporting.

In  case  of  newly  allotted  ground  areas  or  newly  concluded  land  lease contracts,  land  payment  payer  shall  submit  the  tax  declaration  during  20 calendar days of a month following the reporting.

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Should the land property right be transferred from one owner to another during the calendar year, the tax shall be paid by a previous owner for the period from the 1st of January of this year till the month, when he/she transferred the property right to the aforementioned ground area, and a new owner shall pay starting from the month, when he/she acquired the property right.

Should  land  property  right  be  transferred  from  one  owner  to  another during  a  calendar  year,  the  State  Tax  Service  authority  shall  send  a  tax notification-decision  to  a  new  owner  after  obtainment  of  information  on transfer of the property right.

Who has to pay land tax in Ukraine?

The tax for a ground area, where a building in joint ownership of several legal and natural persons is located, shall be calculated taking into consideration a building surrounding territory for everyone from the following persons:

1)  in equal parts – should a building be in common joint ownership of several persons, not divided in kind though, or owned by one of such persons-owners, determined according to their consent, unless otherwise provided by the court;

2)  proportionally to a part owned by each person – should a building be in common partial ownership;

3)  proportionally to a part owned by each person – should a building be in common joint ownership and divided in kind.

The tax for a ground area, where a building in usage of several legal and natural persons is located, shall be calculated to each of them proportionally to the part of a building area being in their usage, and taking into consideration a building surrounding territory.

Lease  payment  for  the  state  and municipal  owned  ground  areas  is  an obligatory payment paid by a lessee to a lessor for a ground area usage.

Ground area lease agreement shall be the ground for tax charge thereof.

The payer of lease payment is a ground area lessee.

The object of taxation is a ground area in lease.

An amount of  lease payment shall be determined in  lease agreement by a lessor (an owner) and a lessee, however the annual payment cannot be less than:

• for agricultural land – the land tax amount established in the Tax Code;
• for other land – the triple land tax amount;
• Lease payment amount cannot be higher than:
• for ground areas intended for accommodation, construction thereon, service and exploitation of power engineering objects which produce electrical energy from renewable energy sources, including technological infrastructure  thereof  (production premises, bases, distributing block (instruments),  electrical  substations,  electrical  network  systems),  -  3 per cent of the normative pecuniary valuation;
• for  other  ground  areas  –  12  per  cent  of  the  normative  pecuniary valuation.

Sublease payment shall not be higher than a lease payment.

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