What is the basis for calculating levy for the one-time (special) voluntary declaration if an individual owns 10 land plots for personal farming, each of which does not exceed 2.0 hectares?
Sub-paragraph “b” Sub-section 94 Section XX “Transitional Provisions” of the Tax Code of Ukraine as of 02.12.2010 № 2755-VI with changes and amendments (hereinafter – TCU) stipulates that objects of the one-time (special) voluntary declaration may be real estate (land, residential and non-residential real estate) owned by declarant on the ownership right (including the joint partial or joint common ownership) and which is located (registered, accounted) on the territory of Ukraine and / or abroad as of the date of submission of one-time (special) voluntary declaration (hereinafter – Declaration).
Paragraph 7 Sub-section 94 Section XX “Transitional provisions” of the TCU determines basis for accrual of levy for the one-time (special) voluntary declaration based on specific declaration objects.
Sub-paragraph 7.2 Paragraph 7 Sub-section 94 Section XX “Transitional Provisions” of the Code stipulates that according to Sub-paragraphs “b” – “g” Paragraph 4 Sub-section 94 Section XX of the Code) the levy’s accrual base for specified declaration objects in the one-time (special) voluntary declaration is determined, in particular, but not exclusively, as:
- declarant’s expenditures for the purchase (acquisition) of declaration object;
- cost determined on the basis of property and property rights evaluation, financial instruments and other assets. Evaluation of the declaration object is carried out in compliance with laws of the country where such asset is located. Value of assets, determined in foreign currency, is reflected in the one-time (special) voluntary declaration in UAH at the official exchange rate of national currency set by the National Bank of Ukraine as of the date of submission of one-time (special) voluntary declaration.
Paragraph 10 Sub-section 94 Section XX “Transitional Provisions” of the TCU stipulates that the composition and volume of assets, sources of purchase (acquisition) of which in case of individual’s non-use of right to submit the one-time (special) voluntary declaration are considered to be those from which taxes and levies are fully paid according to tax legislation.
Such assets include land plots, total size of which for each individual plot does not exceed rate of gratuitous transfer, defined in Article 121 of the Land Code of Ukraine as of 25.10.2001 № 2768-III with changes and amendments (hereinafter – Land Code).
Part 1 Article 121 of the Land Code stipulates that citizens of Ukraine have a right for free transfer of land from state or communal lands, in particular for personal farming – not more than 2.0 hectares.
Provisions of Paragraph 10 Sub-section 94 Section XX “Transitional Provisions” of the TCU are applied in case of individual’s non-use of a right to submit Declaration.
As follows, if an individual has land plots for personal farming, acquired at the expense of income from which taxes and levies have not been paid or not paid in full amount, total amount of which exceeds 2.0 hectares, the declarant independently decides whether to submit the Declaration. Therefore, submitting Declaration, the basis for accrual of levy for each individual land plot is the declarant’s expenditures for purchase (acquisition) / estimated cost of such land plot is amount of which taxes and levies have not been paid.
