Regarding the payment of land tax by the owner of real estate for non-formalized real estate land

The issue of payment of land tax by the owner of real estate located on a land plot, the rights to which are  not issued  by a person, was covered in the General Tax Consultation, approved by the Order of the Ministry of Finance No. 602 dated 06.07.2018.

Thus, according to clause 287.1 of article 287 of the PKU, the landlords and landowners shall pay for the land starting from the day of the emergence of ownership right or the right to use the land plot.  If the ownership right, or the right to use the land plot has been suspended, payment shall be made for the actual period of land ownership in the current year.

Upon transfer of ownership right to a building, structure (their part), the tax on land plots on which such buildings, structures (their parts) are located, taking into account the adjacent territory is paid on general grounds from the date of state registration of ownership right to such land plot (paragraph 287.6  Article 287).

According to Article 125 of the Ukraine’s Land Code, the right of ownership to a land plot, as well as the right of permanent use and the right to lease a land plot arise from the moment of state registration of these rights.  Lease of land plots being in state or communal ownership is performed on the basis of a decision of the relevant executive body or local government in accordance with their powers under Article 122 of the LCU, or Sale and purchase agreement for the leasehold interest to deal with the land plot (in case of sale of the leasehold interest) by concluding a land lease agreement or a Sale and purchase agreement for the leasehold interest to deal with the land plot  (Article 124 of the LCU).

The state registration of land plots is performed in the State Land Cadastre in accordance with the procedure established by the Law (Article 202 of the Ukraine’s Land Code).  In this case, the land plot shall be an individually identified real estate object, which has such characteristics as area, boundaries, identifier in the State Land Cadastre, etc.

In view of the above-said, a person who owns real estate located on a land plot, the rights to which for such a person have not been formalized, cannot be considered a land tax payer within the meaning of Article 269 TCU, until the emergence of relevant rights of such person to this land based on the record formed in the State Land Cadastre in the manner prescribed by law.

Until then, the above-said person shall not pay land tax in accordance with the requirements of the Tax Code of Ukraine.

A similar explanation is also contained in the Public information and reference resource of the State Tax Service under category 111.01, which states that a person who owns real estate located on a land plot, the rights to which for such a person are not formalized, cannot be considered a land tax payer in the meaning of Art.  269 ​​of the Tax Code of Ukraine, until the relevant rights of such person to this land emerge in accordance with the record formed in the State Land Cadastre in the manner prescribed by law.  Until this moment, the above-said person shall not pay land tax in accordance with the  requirements of the TCU.

 

  1. Regarding the payment of land tax by the property owner – the payer of the single tax.

          According to the General Tax Consultation, a natural person – entrepreneur – payer of the single tax, who uses buildings (structures), their parts, for conducting business and who has formalized his rights to land under such real estate objects in accordance with the requirements of the law, shall not pay  land tax.

At the same time, amendments to the Tax Code of Ukraine will come into force from July 1, 2020, regarding the administration of land fees, which stipulates that single tax payers are exempt from the obligation to accrue, pay and file property tax reports on land tax.  We keep in mind the land plots used by single tax payers of the first – third groups for business activities (except for the provision of land and / or real estate located on such land plots for rent (rent, loan) and single tax payers of the fourth group engaged in  agricultural commodity production.

Thus, a natural person – entrepreneur – a single tax payer who uses buildings (structures), their parts, for conducting business to deal with the lease of real estate, and who has formalized his rights to land under such real estate objects in accordance with the requirements of the law, is obliged to pay land tax starting from 01.07.2020

However, in case the fact of registration of ownership or the right to use land plot is missing – the obligation to pay land tax does not arise regardless of the tax status of the property owner and the type of his economic activity.

 

 

Publications 3 August, 2020

Write a comment

Ваш электронный адрес не будет опубликован

17 − 11 =