Law of Ukraine

On Amendment of the Tax Code of Ukraine and Other Laws of Ukraine Regarding Immovable Property

Date of entry into force:
August 4, 2013

The Tax Code of Ukraine regulates relations that arise in the sphere of levying taxes and fees, particularly, determines an exhaustive list of taxes and fees levied in Ukraine, and the procedure for their administration, the payers of taxes and fees, their rights and obligations, the competence of controlling bodies, the authority and obligation of their officials during tax control, and the liability for violation of tax legislation (Article 1 of the Tax Code of Ukraine).

The timeframes for payment of tax liability are established by Article 57 of the Tax Code of Ukraine.

The Law amends Article 57 of the Tax Code of Ukraine, which establish the following:
  • the amount of advance income tax as determined by clause 57.1, Article 57 of the Tax Code of Ukraine, is decreased by the amount of advance income tax when dividends are paid according to clause 153.3, Article 153 of the Tax Code of Ukraine (including based on the results of previous reporting (tax) periods);
  • if the amount of advance income tax paid when dividends are paid according to clause 153.3, Article 153 of the Tax Code of Ukraine exceeds the amount of advance income tax determined in clause 57.1, Article 57 of the Tax Code of Ukraine, the excess amount is deducted from advance income tax in the following reporting months, until it is completely offset;
  • a calculation of monthly advance income tax payments to be paid in the following 12 months is submitted as part of the annual tax declaration. The amount of advance payments determined in the calculation is considered to be an approved amount of monetary obligations. With this, the twelve-month period for payment of advance income tax starts from the March of the current reporting (tax) year and ends in February of the following reporting (tax) year, inclusively;
  • tax declaration and calculation of monthly advance payments for the basic reporting (tax) year are submitted during 60 calendar days following the last calendar day of the reporting (tax) year.

Amended clause 152.9, Article 152 of the Tax Code of Ukraine provides that the basic tax (reporting) period for enterprise income taxation is the calendar quarter or the calendar year, if monthly advance income tax payments are paid according to the procedure established by clause 57.1, Article 57 of the Tax Code of Ukraine.

Exempt from excise tax are: transactions between the issuer and payer of the tax on the buy-back and resale of own issued securities for cash, their allocation, redemption or conversion; transactions related to contribution to statutory capital; and transactions related to the issue, offset or redemption of securities with participation of the bill issuer, pledger and other parties that issued or redeemed an order security or debt security (amended sub-clause 213.2.4, clause 213.2, Article 213 of the Tax Code of Ukraine).

Tax imposed on immovable property other than a land plot is regulated by Article 265 of the Tax Code of Ukraine.

The item taxable with the real estate tax, in addition to the residential property object, is also part thereof (amended sub-clause 265.1, clause 265.2, Article 265 of the Tax Code of Ukraine).

According to amended sub-clause 265.2.2, clause 265.2, Article 265 of the Tax Code of Ukraine, the following immovable property other than land plots is exempt from real estate tax:
  • residential property objects owned (co-owned) by the state or territorial community;
  • residential property objects located in exclusion zones and compulsory evacuation zones as determined by law, including parts thereof;
  • premises of family-type childrens homes;
  • garden cottages or weekend cottages, but no more than one per tax payer;
  • residential property objects, including parts thereof, which belong to natural persons who, according to the law, have the status of multi-child families or foster homes, low-income families, guardians or foster carers, but no more than one per tax payer;
  • dormitories;
  • residential property objects, including parts thereof, which belong to orphans, children deprived of parental care, and persons declared to be such according to the law, and disabled children raised by single parents, but no more than one per child.

Amended clause 265.3, Article 265 of the Tax Code of Ukraine clarifies the item taxable by the real estate tax.

The Law amends clause 265.4, Article 265 of the Tax Code of Ukraine, according to which the taxable item of residential property objects, including parts thereof, owned by a natural person-taxpayer, is decreased to the level of:
  • for an apartment/apartments, regardless of their number to 120 sq. meters;
  • for a residential house/houses, regardless of their number to 250 sq. meters;
  • for various types of residential property objects, including parts thereof (in case a tax payer simultaneously owns apartments and residential houses, including parts thereof) to 370 sq. meters.
This decrease is provided once per each basic tax (reporting) period (year). Tax reliefs are not provided for taxable items used by their owners to generate income (rented, leased, or used in entrepreneurial activity). City, township and village councils can introduce additional tax reliefs for taxes paid on the respective territory for residential property objects owned by religious organizations of Ukraine, whose articles of associations (provisions) are registered according to the procedure established by the law, and which are used to ensure the activity envisaged by such articles of association (provisions). Before February 1 of the current year, bodies of local self-government submit information about any such tax relief to the respective controlling authority of the residential property object.

According to amended clause 265.5, Article 265 of the Tax Code of Ukraine, real estate tax rates are established by decision of the village, township or city council, as a percentage of the minimum wage established by law as of January 1 of the reporting (tax) year, per 1 sq. meter of the taxable item. Real estate tax rates for natural persons are established as follows:
  • no more than 1% - for apartments with residential area under 240 sq. meters, or residential houses with residential area not exceeding 500 sq. meters;
  • 2.7% for apartments with residential area over 240 sq. meters or residential houses with residential area over 500 sq. meters;
  • 1% for various types of residential real estate owned by one tax payer, with total residential area under 740 sq. meters;
  • 2.7% for various types of residential real estate owned by one tax payer, with total residential area exceeding 740 sq. meters.
Real estate tax rates for legal entities are established as follows:
  • 1% for apartments with residential area under 240 sq. meters, or residential houses with residential area not exceeding 500 sq. meters;
  • 2.7% for apartments with residential area over 240 sq. meters or residential houses with residential area over 500 sq. meters.

The Law amends clause 265.7, Article 265 of the Tax Code of Ukraine, changing the procedure for calculating the amount of the real estate tax.

In rural and township areas, natural persons can pay the tax through cash offices of village (township) councils, with a tax payment slip (amended clause 265.9, Article 265 of the Tax Code of Ukraine).

The Law appends the transitional provisions of the Tax Code of Ukraine with a new provision, according to which, in 2013, controlling authorities do not impose tax on immovable property other than land plots for natural persons taxpayers, and this tax is not paid by natural persons.

The Law permits privatization of the Dondiproshakht State Open Joint Stock Company (amended Law of Ukraine On the List of State Property Objects Not Subject to Privatization).
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