​Taxes Made Simple: the Ministry of Finance has released summarizing tax consultations on the land tax

On July 6, 2018, the Ministry of Finance issued its order No. 602 “On the Approval of Summarizing Tax Consultations on the Land Tax” enacting three summarizing tax consultations which refer to: payment of the land tax in regard to the lease of space in multi-apartment houses; payment of the land tax by the owners of immovable properties located on a land plot for which these owners do not have any registered rights; levying the land tax from private entrepreneurs who pay the single tax.

What is this?

Summarizing tax consultations are a tool which makes it possible to significantly reduce the number of administrative and court disputes between taxpayers and controlling authorities, since it removes space for the misinterpretation of tax regulations. The Ministry of Finance provides these tax consultations according to the Law of Ukraine No. 1797 “On Amendments to the Tax Code of Ukraine regarding the Improvement of the Investment Climate in Ukraine”.

What’s it about?
This time, the Ministry of Finance has released three summarizing tax consultations:

1) payment of the land tax in regard to the lease of space in multi-apartment houses.

The tax land in this case shall be paid by a person possessing registered rights on the land plot under a house and the neighboring territory (institution or organisation managing a state-owned or municipal multi-apartment house; owners’ association in a multi-apartment house registered as per the apartment owners’ decision).

2) payment of the land tax by the owners of immovable properties located on a land plot for which these owners do not have any registered rights.

A person owning immovable properties located on a land plot for which this person has no registered rights can’t be considered a land tax payer as per paragraph 269 of the Tax Code of Ukraine, unless this person gains rights on this land plot according to the entry made in the State Land Cadaster according to the law. Till that moment, this person is not obliged to pay the land tax according to the Tax Code of Ukraine.

3) levying the land tax from private entrepreneurs who pay the single tax.

• A private entrepreneur who pays the single tax, uses buildings or their parts for her/his business activity and has registered her/his rights on the land plots under such objects according to the law, shall not pay the land tax;

• par 4 of sub-paragraph 297.1 of paragraph 297 of the Tax Code of Ukraine does not grant an exemption from the land tax to private entrepreneurs paying the single tax, if the land tax obligation is applied to them as co-owners of a multi-apartment house and is a part of the house management costs.

“Podatky Prosto” (Taxes Made Simple) – is an initiative of the Ministry of Finance serving to find solutions for the improvement of tax administration.