Law of Ukraine No. 3050-IX as of 11.04.2023 "On amendments to the Tax Code of Ukraine and other legislative acts of Ukraine regarding exemption from payment of the environmental tax, land payment and tax on immovable property other than land plot, for destroyed or damaged immovable property" (hereinafter – Law No. 3050) entered into force on 06.05.2023.
Law changed mechanism for determining list of territories where hostilities are (were) taking place or temporarily occupied by the Russian Federation (hereinafter – List of territories). List of territories, according to the Law, is determined according to procedure established by the Cabinet of Ministers of Ukraine (Sub-paragraph 2831.2 Article 2831, Paragraph 286.1 Article 286, Paragraph 288.8 Article 288, Sub-paragraph 69.14 Paragraph 69 Sub-section 10 Section XX "Transitional provisions" of the Tax Code of Ukraine (hereinafter – Code)).
Resolution No. 1364 of the Cabinet of Ministers of Ukraine as of 06.12.2022 (hereinafter - Resolution No. 1364) determines some issues of forming list of territories where hostilities are (were) taking place or temporarily occupied by the Russian Federation. In particular, Paragraph 1 of Resolution No. 1364 defines executive authority (Ministry for Reintegration of Temporarily Occupied Territories), which is delegated authority to approve list of territories, and also defines components of the list of territories, requirements for the format of territories by which these territories are reflected in the list, and approved form of the list of territories.
Considering the above specified, within meaning of the Law No. 3050, Resolution No. 1364 can be considered to have established procedure for determining the List of territories.
In this regard, the List of territories approved by Order of the Ministry for Reintegration of Temporarily Occupied Territories of Ukraine No. 309 as of 22.12.2022, registered in the Ministry of Justice of Ukraine on 23.12.2022 under No. 1668/39004 (hereinafter - Order No. 309), may be applied for land payment in the respective territories.
Law No. 3050 regulated issue of establishing local taxes and/or levies and/or providing tax benefits for payment of local taxes and/or levies in territories where local self-government bodies temporarily do not exercise their powers. In such territories, relevant military administrations and military-civilian administrations have a right to make decisions (amendments to Paragraph 12.3 Article 12 of the Code).
Sub-paragraph 69.14 Paragraph 69 Sub-section 10 Section XX "Transitional provisions" of the Code stipulates that owners and users of land plots do not charge or pay land payment (land tax and/or rent) in territories of active hostilities or temporarily occupied by the russian federation:
| individuals | 2022 - from January 1 to December 31; 2023 - from the first day of a month in which date of start of active hostilities or temporary occupation was determined for relevant territories, to the last day of a month in which active hostilities or temporary occupation in relevant territory was completed; |
| legal entities and individuals-entrepreneurs | 2022 - from March 1 to December 31; 2023 - from the first day of a month in which date of the of active hostilities or temporary occupation was determined for relevant territories, to the last day of a month in which active hostilities or temporary occupation of relevant territory was completed. |
For purposes of the land payment in 2022, Order No. 309 is applied to the extent of presence of a certain territory in the List of territories approved by Order No. 309 in its current version (with changes). Dates of start and end of active hostilities or temporary occupation are not taken into account.
Dates of start and end of active hostilities or temporary occupation in 2023 are determined according to data of the List of territories, approved by Order No. 309 in the current version (as amended).
Attention! Order No. 309 in section I approved territories of possible hostilities (part one) and territories of active hostilities (part two), in section II approved territories of Ukraine temporarily occupied by the russian federation. Therefore, for purposes of the land payment according to Sub-paragraph 69.14 Paragraph 69 Sub-section 10 Section XX "Transitional provisions" of the Code applies only to the List of territories of active hostilities (part two of section I) and temporarily occupied by the russian federation (section II).
Also, Law No. 3050 defines specifics of the land payment taxation (land tax and/or rent) for land plots that:
are in conservation (Sub-paragraph 283.1.2 Paragraph 283.1 Article 283, Paragraph 288.8 Article 288 of the Code);
contaminated with explosive objects (Sub-paragraph 283.1.9 Paragraph 283.1 Article 283, Paragraph 288.8 Article 288 of the Code);
unsuitable for use in connection with potential threat of their contamination by explosive objects (Paragraph 283.2 Article 283, Paragraph 288.8 Article 288 of the Code).
Land payment (land tax and/or rent) are not charged and paid:
1) for land plots under conservation:
| basis (presence of all listed components) |
| - decision of relevant executive authority or local self-government body, which disposes state and communal land plots according to powers specified in Article 122 of the Land Code of Ukraine, on approving working project of the land management regarding conservation of the land plot; - information/data of the State Land Cadastre; |
| release period | land of state and communal ownership | from the first day of a month in which decision was made to the last day of a month in which land and soil protection measures are completed according to the information of the State Land Cadastre; |
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| privately owned land | from the date of entering information into the State Land Cadastre about land and soil protection measures until the last day of a month in which land and soil protection measures are completed according to the State Land Cadastre information; |
2) for land plots contaminated with explosive objects:
| basis | - information/data of the State Land Cadastre, including on land plots surveyed by operators of mine action activities; |
| release period | from the first day of a month on which survey of the land plot by mine countermeasures operators begins until the last day of a month in which such land plots are recognized as suitable for use; |
3) for land plots located in territories where active hostilities are (were) taking place or temporarily occupied by the russian federation, contaminated with explosive objects:
| basis (presence of all listed components) | - approved List of territories; - payer's application to the local self-government body, military administration or military-civilian administration about potential contamination of the land plot with explosive objects; - decision of the local self-government body, military administration or military-civilian administration on the establishment of tax benefits for payment of local taxes and levies in relation to the land plot; - information/data of the State Land Cadastre; |
| release period | - from the first day of a month following the month in which active hostilities or temporary occupation of relevant territory ended (including when date of start of the survey of dangerous area by mine action operators comes after date of the end of hostilities or temporary occupation of relevant territory) until the last date of the month in which such land plots are recognized as suitable for use; |
4) for land plots unsuitable for use due to the potential threat of their contamination by explosive objects:
| basis (presence of all listed components) | - decisions of the local self-government bodies, military administrations and military-civilian administrations to establish tax benefits for payment of local taxes and/or levies based on the taxpayer's application; - payer's application to the local self-government body, military administration or military-civilian administration about potential contamination of the land plot with explosive objects; |
| release period | from the first day of a month on which decision date falls to the last day of a month on which the earlier date falls: – or the last day of a period for which relief from payment of local taxes and/or levies was granted according to the adopted decision (including taking into account changes made to such decision) or date of cancellation of relevant decision); – or date of cancellation of relevant decision, – or date of start of the survey of land plot by operators of mine action activities, - or recognition of the land plot as suitable for use. |
Annual amount of payment for such land plots is determined in proportion to the number of months in which the land plot was recognized as suitable for use.
Requirements of Sub-paragraph 12.3.7 Paragraph 12.3 Article 12 of the Code regarding the prohibition of accepting individual tax benefits do not apply to decisions made on the basis of ta payers' applications to recognize land plots as unsuitable for use due to the potential threat of their being littered with explosive objects (amendments to Sub-paragraph 12.3.7 Paragraph 12.3 Article 12 of the Code).
Law No. 3050 determines possibility of clarifying tax obligations for the land payment declared before the Law No. 3050 came into force, by submitting clarifying calculations to the previously submitted land payment declarations for 2022 and 2023:
| Tax/type of payment | obligation to be clarified/corrected | Period during which adjustment is possible |
| For land plots located in the territories of active hostilities or in the territories of Ukraine temporarily occupied by the russian federation, included in the List of territories | ||
| land payment (land tax and/or rent) | declared tax liabilities for land payment for 2022 and/or 2023 | for March 2022 - December 2023 |
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| For a period of 2023, tax obligations are specified according to periods of the beginning and completion of active hostilities or temporary occupation in respective territories. |
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| Payers who did not declare their tax obligations in 2022-2023 for tax objects located in territories not included in Order No. 309, or located in territory of possible hostilities approved by Order No. 309, must declare the corresponding tax obligations. |
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| For land plots located in territories that do not depend on the List of territories |
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| rent | declared for 2022 and/or 2023 tax obligations from rent for land plots contaminated by explosive objects or unsuitable for use due to the potential threat of their contamination by explosive objects. | for period 2022-2023 |
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| Clarification of tax liabilities is carried out for periods in which land plots were recognized as contaminated by explosive objects or unsuitable for use due to the potential threat of their contamination by explosive objects. |
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Compiled, sent (delivered) before the date of entry into force of the Law No. 3050, tax notifications-decisions on the land payment, for land plots, specified in Sub-paragraph 283.1.9 Paragraph 283.1, Paragraph 283.2, Paragraph 288.8 Article 288, Sub-paragraph 69.14 Paragraph 69 Sub-section 10 Section XX the Code, are subject to cancellation (withdrawal); monetary obligations and tax debt determined by the controlling body for the land payment - to cancellation.
Overpaid sums of land payment arising as a result of cancellation (revocation) of tax notifications-decisions is credited exclusively to account of future payments from this tax, except for the following cases: if such payer has tax debt from land payment, the overpaid sums are credited to account repayment of such debt.
Application of financial sanctions and penalties:
Procedure for payer to fulfill obligations during the martial law, in particular, regarding compliance the deadlines for payment of taxes and levies, submission of reports, is established by Sub-paragraph 69.1 Paragraph 69 Sub-section 10 Section XX "Transitional Provisions" of the Code (hereinafter - Sub-paragraph 69.1).
Clause 14 of Sub-paragraph 69.1 stipulates that in case of the taxpayer’s self-correction, in compliance with procedure, requirements and restrictions specified in Article 50 of the Code, errors that led to the understatement of the tax liability in the reporting (tax) periods falling 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 penalty.
That is, payers of land payment who will submit to the controlling bodies clarifying tax declarations for reporting (tax) periods falling during the martial law will not be charged with financial sanctions and penalty.