Should the one-time (special) voluntary declaration be submitted by individual who inherited (received as a gift) movable or immovable property from a family member of the first or second degree of kinship?
Paragraph 1 Sub-section 94 Section XX “Transitional provisions” of the Tax Code of Ukraine (hereinafter –Code) stipulates that the one-time (special) voluntary declaration is a special procedure for voluntary individual’s declaration, determined in Paragraph 3 Sub-section 94 Section XX of the Code, of assets located on the territory of Ukraine and / or abroad, if such individual’s assets were received (acquired) by at the expense of income subject to taxation at the time of their accrual (receipt) in Ukraine and from which taxes and levies were not paid or not in full amount according to legislative requirements on taxation and / or international agreements, the binding nature of which was approved by the Verkhovna Rada of Ukraine and / or which were not declared in violation of tax and currency legislation, the control over which is entrusted to the supervisory authorities during any of the tax periods that occurred before 01.01.2021.
Paragraph 3 Sub-section 94 Section XX “Transitional provisions” of the Tax Code of Ukraine № 2755-VI as of 02.12.2010 with changes and amendments (hereinafter – Code) stipulates that the one-time (special) voluntary declaration may be used by resident individuals, including self-employed individuals, as well as individuals who are not residents of Ukraine, but who were residents at the time of receipt (acquisition) of declaration objects or at the time of accrual (receipt) of income, due to which the objects of declaration were received (acquired) and who are or were taxpayers according to the Code.
Personal income taxation is governed by provisions of Section IV of the Code.
Procedure for taxation of income received by the taxpayer as a result of inheritance or gift of the real estate or movable property is defined in Article 174 of the Code according to Sub-clause “a” of Sub-paragraph 174.2.1 Paragraph 174.2 of which the inheritance objects are inherited by the testator’s family members of the first and second degrees of kinship and are taxed at zero rate.
At the same time, gifts specified in Paragraph 174.1 Article 174 of the Code, gifted to the taxpayer by another individual are taxed according to the rules stipulated by Section IV of the Code for inheritance taxation (Paragraph 174.6 Article 174 of the Code).
Individuals responsible for payment (transfer) of tax to the budget are the heirs / gifted individuals who received the inheritance / gift according to Paragraph 174.3 Article 174 of the Code.
Income in the value form of inherited / gifted property (within taxable limits is indicated in the annual tax declaration, except for heirs who inherited / were gifted with objects that are taxed at zero rate of the personal income tax.
As follows, if objects of movable or immovable property are inherited by the declarant or as a gift from a family member of the first or second degree of kinship, an obligation to submit the one-time (special) voluntary declaration for such taxpayer does not arise in the absence of other grounds for submission of such declaration.
