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.
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.
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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