Law of Ukraine № 4015-IX as of 10.10.2024 “On amendments to the Tax Code of Ukraine and other laws of Ukraine on ensuring balanced budget revenues during the martial law” (hereinafter – Law № 4015) made changes the Tax Code of Ukraine (hereinafter – Code), particularly added it with provisions regarding specifics of determining the minimum tax liability.
Paragraph 74 Sub-section 10 Section XX “Transitional Provisions” of the Code establishes that determining the minimum tax liability in a period from January 1, 2024 to December 31 of year in which the martial law will be cancelled or abolished, 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, amount of the minimum tax liability, determined according to Sub-paragraphs 38 1.1.1 and 38 1.1.2 Article 38 1 of the Code, cannot be less than 700 UAH per 1 hectare, and for land plots in area of which share of arable land is at least 50 percent – 1400 UAH per 1 hectare.
Order of the Ministry of Finance of Ukraine № 57 as of 31.01.2025 “On amendments to Order of the Ministry of Finance of Ukraine № 578 as of 19.06.2015” (hereinafter – Order № 57), registered in the Ministry of Justice of Ukraine on 14.02.2025 under № 232/43638 (which has not been published as of 19.02.2025), made changes to the single tax payers’ declaration forms and their annexes.
Particularly, annex “Calculation of the total minimum tax liability for the tax (reporting) year” contains:
provisions of Paragraph 74 Sub-section 10 Section XX "Transitional provisions" of the Code, which are in effect from 01.12.2024, namely: amount of the minimum tax liability, determined according to Sub-paragraphs 38 1.1.1 and 38 1.1.2 Article 38 1 of the Code, cannot be less than 700 UAH per 1 hectare, and for land plots in area of which share of arable land is not less than 50% - 1400 UAH per 1 hectare, except for land plots, land shares (shares) located in territories of possible hostilities, which are included in the List of territories in which hostilities are (were) conducted or temporarily occupied by the russian federation.
Paragraph 46.6 Article 46 of the Code stipulates that if as a result of changes in taxation rules, tax reporting forms change, until determination of new forms of declarations (calculations) that come into force for preparation of reports for the tax period following the tax period in which they were published, forms of declarations (calculations) that were in force before such determination are valid.
In addition, Paragraph 46.4 Article 46 of the Code stipulates that if the taxpayer believes that the tax declaration form determined by the central executive body that ensures formation and implementation of the state financial policy increases or decreases tax obligations, contrary to norms of the Code on such tax or levy, such taxpayer has a right to indicate this fact in a specially designated place in the tax declaration.
If necessary, the taxpayer may submit, together with such tax declaration, additions compiled in any form, which will be considered as integral part of the tax declaration. Such addition is submitted with explanation of reasons for its submission. Taxpayer who submits reporting in the electronic form has to submit such addition in the electronic form.
Please note that the single tax payers of Group IV based on the results of their activities for 2024 must calculate and declare the minimum tax liability in Annex 3 of the current Declaration form. Herewith, in columns 3 - 8 of Annex 3 to the Declaration, payers indicate the corresponding indicators: "NGOd/NGO", "M", "S" for calculating amounts of the minimum tax liability according to Sub-paragraphs 38 1.1.1 and 38 1.1.2 Article 38 1 of the Code for each land plot. In order to comply with requirements of Paragraph 74 Sub-section 10 Section XX of the Code, the payer additionally calculates the minimum allowable value of amount of the minimum tax liability for each land plot (not less than 700 UAH per 1 hectare, and for land plots in area of which share of arable land is not less than 50 percent – 1400 UAH per 1 hectare). Columns 9 - 10 of Annex 3 to the Declaration reflect amount of the minimum tax liability that has the greatest significance (either as calculated according to Article 38 1of the Code or according to Paragraph 74 Sub-section 10 Section XX of the Code).
To calculate the minimum tax liability, the coefficient "K" is applied, which is 0.05 according to Sub-paragraphs 38 1.1.1 and 38 1.1.2 Paragraph 381.1 Article 38 1 of the Code
It should be noted that temporarily, to calculate the minimum tax liability, the coefficient "K" is applied with value: 0.04 - for the tax (reporting) years 2022 and 2023 (Paragraph 74 Sub-section 10 Section XX of the Code);
0.057 – from the tax (reporting) year 2025 and for subsequent years, ending with year in which the martial law is cancelled or abolished (Paragraph 67 1 Sub-section 10 Section XX of the Code)
Therefore, for the tax (reporting) year 2024, the coefficient "K" is applied – 0.05.
At the same time, for the single tax payers of Group IV individuals-entrepreneurs who carry out activities exclusively within the framework of a farm registered according to the Law of Ukraine "On farming", the coefficient "K" defined in Sub-paragraphs 38 1.1.1 and 38 1.1.2 Paragraph 381.1 Article 38 1 of the Code is applied at a half the rate (Sub-paragraph 38 1.1.3 Paragraph 38 1.1 Article 38 1 of the Code)
Total value of the minimum tax liability is transferred to line 01 of Section II in Annex 3 of the Declaration.
Payers may submit addition to the Declaration with relevant explanations for calculating the minimum tax liability, taking into account Paragraph 74 Sub-section 10 Section XX of the Code.
After Order № 57 enters into force, the taxpayers will be able to submit a clarifying Declaration in an updated form for the reporting (tax) period 2025, with a reflection in Annex 3 of detailed indicators for calculating the minimum tax liability based on the results of activities for the reporting (tax) period of 2024, taking into account provisions of Paragraph 74 Sub-section 10 Section XX "Transitional provisions" of the Code.
At the same time, it should be informed that 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 underestimation of tax liability in the reporting (tax) periods that fall during the martial law, such taxpayers are exempted from accrual and payment of financial sanctions provided for in Paragraph 50.1 Article 50 of the Code, and fines (Sub-paragraph 69.1 Paragraph 69 Sub-section 10 Section XX of the Code).