Can the real estate objects that do not exceed norms defined in Paragraph 10 Sub-section 9 Note 4 Section XX of the Tax Code of Ukraine, but purchased for funds from which taxes were not paid and reflected by an individual in the one-time (special) voluntary declaration, be a basis for charging levy for the one-time (special) voluntary declaration?

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.

Herewith, objects of the one-time (special) voluntary declaration, determined in Sub-paragraphs 14.1.280 and 14.1.281 Paragraph14.1 Article. 14 of the Code, can be individual’s assets that belong to the declarant in the ownership right (including the joint partial ownership right or joint common ownership right) and are located (registered, in turnover, registered, etc.) in the territory of Ukraine and / or outside its borders as of the date of submission of the one-time (special) voluntary declaration, in particular real estate (land plots, residential and non-residential real estate).

For purposes of this Sub-section, the real estate also includes objects of unfinished construction, which:

are not taken into operation or the ownership right of which is not registered in manner prescribed by the law, but property rights on such objects belong to declarant on the ownership right;

are not put into operation and located on land plots belonging to declarant on the private property right, including joint property, on the long-term lease right or on the superficies right (Sub-paragraph “b” Sub-section 9⁴ Section XX of the Code).

Herewith, composition and volume of assets, sources of receipt (acquisition) of which in case of the individual’s non-use of right to submit the one-time (special) voluntary declaration are considered to be those from which taxes and levies were fully paid according to tax legislation, namely:

immovable property located on the territory of Ukraine, which as of the end of a period of the one-time (special) voluntary declaration belonged to individual on the ownership right (including joint common or joint partial ownership), confirmed by the relevant state registers, in the size of:

a) residential real estate:

apartment / apartments, total area of which does not exceed a total of 120 square meters or property rights confirmed by relevant documents for such apartment or apartments in an apartment building of unfinished construction;

residential house / residential houses registered according to established procedure in Ukraine, total area of which does not exceed 240 square meters or a residential house of unfinished construction or houses of unfinished construction, total area of which does not exceed 240 square meters, provided that such individual has ownership right of the land plot of a corresponding purpose;

b) non-residential real estate objects – non-residential non-commercial buildings and / or non-residential buildings of unfinished non-commercial construction, total area of which does not exceed 60 square meters;

c) land plots, total size of which for each individual plot does not exceed the gratuitous transfer norm, defined in Article 121 of the Land Code of Ukraine as of 25.10.2001 № 2768-III with changes and amendments.

Given the above specified, in case that individual who owns real estate objects that do not exceed norms specified in Paragraph 10 Sub-section 9⁴ Section XX of the Code, but purchased at the expense of funds from which taxes were not paid, will exercise right to submit the one-time (special) voluntary declaration; payment of levy for the one-time (special) voluntary declaration is carried out on the general grounds.

At the same time, if individual independently decides not to use right to submit the one-time (special) voluntary declaration, then sources of receipt (acquisition) of the specified real estate objects are considered to be those from which taxes and levies were fully paid according to tax legislation, and therefore calculation and payment of levy for the one-time (special) voluntary declaration is not carried out.