Court supported the controlling authority’s position regarding legality of increasing amount of monetary obligation for the lease of land plot

Press service of the State Tax Service of Ukraine, published 19 August 2024 at 09:53 Chapter: News

Court supported the controlling authority’s position regarding legality of adopted tax notification-decision, which increased amount of the plaintiff's monetary obligation for payment of "rent by legal entities".

Dispute arose between the parties regarding determination of coefficient of functional use of land plots, which should be used in the process of calculating normative monetary value of a separate land plot. There is no dispute between the parties regarding taxation object and entity that is the rent payer.

Panel of judges notes that information on the code for purpose of land plots, which existed at the time of conclusion of the land lease agreement and until 2017 corresponded to the Ukrainian classifier of the land use, approved by letter of the State Service of Ukraine for geodesy, cartography and cadastre of Ukraine № 14-1-7/1205 as of 24.04.1998, which gives grounds for conclusion that information about land plots in part of code of the Ukrainian classifier of the land use of 1998 was transferred to the State Land Cadastre, and therefore the claimant's reference to non-fulfillment of these legislative prescriptions is unfounded.

The Supreme Court certified that Procedure for normative monetary valuation of lands of populated areas, approved by Order of the Ministry of Agrarian Policy and Food of Ukraine № 489as of 25.11.2016, should be applied to procedures of normative monetary valuation of lands of populated areas, which will be carried out from January 1, 2017, and not provides for no adjustments to previously carried out regulatory monetary valuations of lands.

Cassation court considers that it is the owner of land plot or land user who should be interested in ensuring that information in the State Land Cadastre is complete and reliable, for which such subjects are given a right to receive certificates (without limiting number of applications for them) and to enter changes to information about the land plot. Therefore, it was the plaintiff, as a land user, who should have been interested in the fact that the State Land Cadastre had information on the purpose of land plots according to codes of the Land use classifier 2010. In case, there is no evidence that during the disputed period, the plaintiff submitted information to the State Land Cadastre about types of land plots according to the land use classifier 2010.

Having assessed legal nature and procedure for formation of certificates on the normative monetary valuation of a specific land plot, the panel of judges came to conclusion that issuing this document is a way of reflecting value indicator of monetary valuation of this land plot on the basis of information about it existing in the State Land Cadastre and using legally established indicators, in particular, the Kf indicator, which characterizes its functional use.

In view of the specified legal regulation, the Court agrees with conclusions of the courts of previous instances regarding the fact that calculating rent for the land plot, it was necessary to apply coefficient characterizing functional use of the land plot (Kf) with a value of 2.0 for 2017 and with a value of 3.0 for 2018 and 2019, instead of the 0.5 coefficient, which characterizes functional use of the land plot, erroneously applied by the plaintiff.

In addition, the Supreme Court emphasizes that legality of formation of indicators of Certificates from technical documentation on normative monetary valuation of the land plot, on the basis of which the tax authority additionally accrued tax liability, was contested by the plaintiff in court proceedings in case № 160/13919/20, however by decision of the Dnipropetrovsk district administrative court as of 07.04.2021, left unchanged by decision of the Third administrative court of appeal as of 23.11.2021, the claim was refused. Illegality of actions of Main Directorate of the State Geocadastre in Dnipropetrovsk region from the application during formation of Certificate from technical documentation on normative monetary assessment of the land plot has not been established. Therefore, legality of the specified Certificates with its indicators was not refuted and was not recognized as illegal.

Cassation administrative court as a part of the Supreme Court on 29.07.2024 in case № 160/9289/20 dismissed the plaintiff’s cassation appeal; decision of the Dnipropetrovsk district administrative court as of 23.06.2022 and decision of the Third administrative court of appeal as of 11.01.2023 were left unchanged.