To the attention of the single tax payers of Group IV (legal entities)!
Paragraph 2971.1 Article 2971 of the Tax Code of Ukraine (hereinafter – Code) stipulates that the single tax payers – owners, tenants, users on other terms (including emphyteusis) of land plots classified as agricultural land, as well as heads of family farms, including land plots belonging to members of such family farms and used by such family farms are required to submit annex with calculation of the total minimum tax liability as a part of tax declaration for the tax (reporting) year.
Minimum tax liability is the minimum amount of tax liability for payment of taxes, levies, payments, control over fulfillment of which is entrusted to the controlling bodies, related to the production and sale of one's own agricultural products and/or with ownership and/or use (rent sublease, emphyteusis, permanent use) of land plots classified as agricultural land, calculated according to the Code.
Amount of the minimum tax liability determined for each of land plots, right to use of which belongs to one legal entity or individual, including individual-entrepreneur is general tax liability (Sub-paragraph 14.1.1142 Article 14 of the Code).
Minimum tax liability is determined for period of ownership (use) of land plot, which falls on relevant tax (reporting) year (Sub-paragraph 381.1.4 Paragraph 381.1 Article 381 of the Code).
At the same time, taking into account Sub-paragraph 298.8.1 Paragraph 298.8 Article 298 of the Code, in order to make a transition to the simplified taxation system or to annually confirm the single tax payer’s status, agricultural producers must submit particularly not later than February 20 of the current year:
general tax declaration from tax for the current year regarding the entire area of land plots from which the tax is paid (agricultural land (arable land, hayfields, pastures, perennial crops), and/or land of the water fund of inland water bodies (lakes, ponds and reservoirs) to the controlling body according to its location (place of tax accounting);
reporting tax declaration from tax for the current year separately for each plot of land to the controlling body at the location of such land plot (legal entities).
Single tax payer’s declaration form of Group IV was approved by Order of the Ministry of Finance of Ukraine № 578as of 19.06.2015, with changes and additions (hereinafter – Declaration).
In particular, annex 3 "Calculation of the total minimum tax liability for tax (reporting) year" is integral part of Declaration (hereinafter – annex 3) and is submitted both to the reporting and general Declarations.
According to the note to section Calculation part of the Declaration and Clauses 2 and 3 paragraphs of Paragraph 2971.7 Article 2971 of the Code, the single tax payer of Group IV is obliged to increase amount of the single tax payable to the budget specified in Declaration for the following tax (reporting) year by the amount of positive value of difference between amount of the total minimum tax liability and total amount of paid taxes, levies, payments and expenses for renting land plots.
That is, Annex 3 with calculation of the minimum tax liability for 2022 is submitted by agricultural producers as a part of Declaration for 2023, Annex 3 with calculation of minimum tax liability for 2023 is submitted as a part of Declaration for 2024.
At the same time, if agricultural producers independently renounce the single tax payer’s status of Group IV for 2024 (make a transition to paying other taxes and levies) or the controlling bodies do not confirm the single tax payer’s status of Group IV, then they have obligation to determine minimum tax liability for 2023.
As follows, business entities that submitted Declarations in 2023, in connection with the loss (independent refusal) of the single tax payer’s status of Group IV for 2024, have obligation to declare minimum tax liability for 2023.
To date, the State Tax Service of Ukraine has updated software, which allows such taxpayers to create Annex 3 for the two previous tax periods in the process of submitting the Declaration.
Taking into account peculiarities of declaring the single tax of Group IV regarding submission of Declaration for the current year, in which the single tax liability for the current year is determined, and submission of Annex 3 (with calculation of the minimum tax liability) is carried out for the previous year relative to the current one, it is recommended for payers, who independently renounced their status, or taxpayers whose status as a taxpayer has not been confirmed by the controlling bodies, to declare the minimum tax liability by submitting clarifying Annex 3 to the Declaration for 2023.
Please also note that Sub-paragraph 69.38 Paragraph 69 Sub-section 10 Section XX of the Code stipulates that temporarily for a period from August 1, 2023 until termination or abolition of the martial law on the territory of Ukraine, introduced by Decree of the President of Ukraine "On introduction of the martial law in Ukraine"№ 64/2022 as of 24.02.2022, approved by the Law of Ukraine "On approval of Decree of the President of Ukraine "On introduction of the martial law in Ukraine" № 2102-IX as of 24.02.2022, in case of self-correction by the taxpayer in compliance with procedure, requirements and restrictions specified in Article 50 of the Code, of errors that led to an understatement of tax liability, such payer is exempted from accrual and payment of financial sanctions and a penalty provided for in Paragraph 50.1 Article 50 of the Code.
