Posted On


Tax Committee takes into account some amendments to so-called 'resource' bill – UAC

KYIV. Sept 15 (Interfax-Ukraine) – The Verkhovna Rada committee has considered and taken into account a number of amendments submitted by the Ukrainian Agri Council (UAC) to the second reading of the bill on the balance of budgetary receipts, such as a one-year deferral of the computation of the minimum tax liability on cultivated land for which tax is not paid and reduction of its size to 4% of the appraised value of the land plot.

This was reported on the UAC website on Tuesday with reference to the results of the meeting of the Parliamentary Committee on Finance, Tax and Customs Policy held on September 13, which considered amendments to the second reading of the so-called "resource" bill (No. 5600) with amendments to the Tax Code of Ukraine and some legislative acts of Ukraine on ensuring the balance of budgetary receipts.

The parliamentary committee took into account the amendment proposing to postpone the accrual of minimum tax liability until 2022 instead of 2021 in the original version of the document. Thus, agricultural producers will pay the minimum tax liability for 2022 in 2023.

The UAC said that it also took into account the proposal to reduce the size of the minimum tax liability charged on a land plot from 5% of its appraised value to 4%. Previously, the UAC proposed to reduce this coefficient, which is necessary to calculate the size of the minimum tax liability, to 3.5%.

"By bill No. 5600 passed at the first reading, individuals who owned up to 0.5 hectares of agricultural land were exempted from paying the minimum tax liability. But the legislators submitted the requirement in such a way that if an individual has a total of 0.51 hectares in use, then it should already compute the minimum tax liability for the entire area of the land plot, and not for 0.01 hectares. It was removed from the document for the second reading," the UAC said, clarifying one of the amendments made to the document for the second reading.

In addition, by the second reading of the bill, it is envisaged that 20% of the rent for land plots leased from legal entities, including plots in state or municipal ownership, will be credited as the payment of the minimum tax liability. The UAC said that in the original version of the bill, the rent for private land of legal entities was not credited at all, while the amount of rent for land in state and communal ownership was counted in full, which could lead to manipulations with the minimum tax liability.

"The exemption from personal income tax when selling their own grown products will depend on the amount of income they receive, and will be provided if the amount of income does not exceed 12 times the minimum wage. That is, the benefit of exempting income received from land plot with an area of up to 2 hectares was replaced by the benefit for income equaling 12 minimum tax liabilities," the UAC said.

The Council said that during the first reading of the document, the exemption from personal income tax depended on the size of the land plot and was charged on income from a plot of 0.5 hectares and more.