How is it possible to correct self-identified errors made in previous reporting periods in the real estate tax other than land declaration with the "Reporting" ("Reporting new") type?

Information and Reference Department, published 21 June 2022 at 11:27 Chapter: News

Paragraph 50.1 Article 50 of the Tax Code of Ukraine № 2755-VI as of 02.12.2010 (hereinafter – TCU) stipulates that, if in future tax periods (taking into account the statute of limitations specified in Article 102 of the TCU), the taxpayer independently (including the electronic verification results) finds errors contained in previously submitted tax declaration (except for restrictions specified in Article 50 TCU), such taxpayer is obliged to send adjusting calculation to such tax declaration in a form valid at the time of submission of adjusting calculation. Taxpayer has a right not to submit such calculation if the relevant adjusted figures are indicated in tax declaration for any subsequent tax period during which such errors were independently detected (including the results of electronic verification).

Taxpayer, who independently (including the electronic verification results), reveals the tax liability understatement of previous tax periods, is obliged, except as provided in Paragraph 50.2 of Article 50 of the TCU, to:

a) either send adjustment calculation, pay amount of arrears and a penalty of three percent of such amount until the submission of such adjustment calculation;

b) reflect amount of arrears in declaration of this tax submitted for a tax period following a period in which the tax liability understatement, increased by a fine of five percent of such amount, with a corresponding increase the total amount of monetary liability from this tax.

Real estate tax other than land declaration form is approved by Order of the Ministry of Finance of Ukraine № 408 as of 10.04.2015 (as amended by Order № 897 of the Ministry of Finance of Ukraine as of 15.11.2018) (hereinafter – Declaration).

Declaration’s integral parts are Annexes: Annex 1 "Calculation № in the part of residential real estate" and Annex 2 "Calculation № in the part of non-residential real estate" (hereinafter – Annexes).

In case of correction of errors for previous reporting periods in Declaration with the "Reporting" ("Reporting new") type in line 2 "Tax period" of the Declaration’s title it is needed to fill in field 1.1 "reporting" (indicate reporting year for which such Declaration is submitted) and field 1.2 "to be specified" (specify tax period (year).

At the same time, as a part of the Declaration it is possible to specify indicators only for one tax (reporting) period which has passed, with the same code for the Classifier of objects of administrative-territorial organization of Ukraine of local government for which the Declaration was submitted in the last specified period.

In Annexes, the Section I is filled "Calculation of tax liability", where line 3 "Accrued for 20__ year, total (sum of lines 2.1 - 2.n, where n - line number)" (hereinafter - line 3) indicating reporting year, which corresponds to the value of field 1.1 of the Declaration’s title. Sum of values of column 20 of line 3 Section I of Annex 1 is transferred to line 5.1 (for residential real estate) of the Declaration’s title part, the sum of values of column 19 of line 3 of section I of Annex 2 is transferred to line 6.2 (for non-residential real estate) of the Declaration’s title.

To clarify the indicators of previous reporting period in Annexes, Section II "Clarification of tax liability" is filled in, which, in particular, states:

line 5 indicates year for which the clarification corresponds to the year specified in line 1.2 of the Declaration’s title and amount of increase of tax liability for previous tax period, which is transferred to line 5.2 (for residential real estate) and / or 6.2 (for non-residential real estate) of the Declaration’s title;

line 6 indicates year for which the clarification is made, which corresponds to the year specified in line 1.2 of the Declaration’s title and the amount of reduction of tax liability for the previous tax period, which is transferred to line 5.3 (for residential real estate) and / or 6.3 (for non-residential real estate) of the Declaration’s title;

line 7 indicates amount of the 5% fine to the amounts specified in line 5 of section II, which is transferred to line 5.4 (for residential real estate) and / or 6.4 (for non-residential real estate) of the Declaration’s title;

line 8 indicates amount of penalty accrued on the amount of identified underpayment of tax liability, which is transferred to line 5.5 (for residential real estate) and / or 6.5 (for non-residential real estate) of the Declaration’s title.