Can a garage be object of the one-time (special) voluntary declaration?
Press service of the State Tax Service of Ukraine , published 24 November 2021 at 13:09 Chapter: News
Paragraph 1 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 the one-time (special) voluntary declaration is a special procedure for voluntary individual’s declaration 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.
Sub-paragraph “b” Paragraph 4 Sub-section 94 Section XX of the 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).
For purposes of Sub-section 94, 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 law but property rights to such objects belong to declarant on the ownership right;
not put into operation and located on land plots belonging to declarant on the private property right, including joint ownership, the long-term lease right or superficies.
According to Sub-paragraph 14.1.129 Annex 1 Paragraph 14.1 Article 14 of the TCU, the following is allocated in non-residential real estate (buildings, premises that are not classified to the housing stock under the law):
garages – garages (aboveground and underground) and covered car parks (Sub-paragraph “g” of Sub-paragraph 14.1.129 Annex 1 Paragraph 14.1 Article 14 of the TCU);
outbuildings (homestead) – auxiliary (non-residential) premises, which include sheds, barns, garages, summer kitchens, workshops, toilets, cellars, boiler rooms, boilers, transformer substations, etc. (Sub-paragraph “e” of Sub-paragraph 14.1.129 Annex 1 Paragraph 14.1 Article 14 of the TCU).
Determining the affiliation of a non-residential real estate object (building, unfinished construction) to a particular class of buildings by purpose is carried out on the basis of documents confirming their ownership.
Paragraph 10 Sub-section 94 Section XX of the TCU determines composition and volume of assets, sources of receipt (acquisition) of which in case of individual’s non-use of a right to submit the Declaration are considered to be those from which taxes and levies are fully paid according to tax legislation.
This exclusive list includes real estate in the form of non-residential real estate – non-residential non-commercial buildings and / or non-residential buildings of unfinished non-commercial construction, total area of which does not exceed 60 sq.m., 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 right of ownership (including joint common or joint partial ownership), which is confirmed by information from relevant state registers (Sub-paragraph “b” of Sub-paragraph 2 Paragraph 10 Sub-section 94 Section XX of the TCU).
Herewith, provisions of Paragraph 10 Sub-section 94 Section XX of the TCU are applied in case of individual’s non-use of a right to submit the one-time (special) voluntary declaration.
Given the above specified, a garage purchased at the expense of income from which taxes and levies have not been paid or not in full amount can be the declaration object in the case of use of individual’s right to submit Declaration.