Calculating minimum tax liability, actual ownership or usage period of the land is of key importance.
As explained by the Ministry of Finance of Ukraine at request of the State Tax Service, if during a calendar year the plot passes from one owner or user to another (particularly, under the lease, sublease or emphyteusis terms), minimum tax liability is distributed between them in proportion to the usage time.
Specifically:
- previous land user pays minimum tax liability for the period from January 1 to month when the right ceased;
- new – starting from month of acquisition of right to the plot.
In this case, amount of minimum tax liability is included in the total tax liability of each participant separately, in proportion to the period of actual ownership or use of the land plot.
Therefore, minimum annual amount of the minimum tax liability established by provisions of the Tax Code of Ukraine is subject to adjustment depending on the number of months of actual use of the land. This allows for more accurate distribution of the tax burden between payers and avoids accrual of liabilities for periods when the land plot was not actually in their use.
Reminder! According to provisions of the Tax Code of Ukraine, minimum annual amount of the minimum tax liability is:
- not less than 700 UAH per 1 hectare in general;
- not less than 1400 UAH per 1 hectare for areas where arable land is more than 50%.