The Tax Authority Cannot Deny Land Tax Benefits During the War Due to the Absence of a Cabinet of Ministers List — Supreme Court

The Supreme Court clarified: a taxpayer cannot lose the right to a tax benefit solely because the Cabinet of Ministers has not approved the list of combat zones. If such a list is defined by an authorized body and the law provides for a benefit, it can be applied.

Additionally, a separate basis for exemption from rent payment may be a decision by the local council to establish a zero rate.

The absence, at the time of submitting the amended declaration, of a list of territories directly approved by the Cabinet of Ministers of Ukraine is not grounds for refusing the taxpayer the application of the benefit defined in subparagraph 69.14 of paragraph 69 of subsection 10 of section XX of the Tax Code of Ukraine. The order of the Ministry for the Reintegration of Temporarily Occupied Territories dated December 22, 2022, No. 309, is a proper legal basis for exemption from rent payment. Moreover, local self-government bodies have the right to independently set a zero rent rate.

On May 21, 2026, the Supreme Court, in a panel of judges of the Cassation Administrative Court, considered the cassation appeal of the Main Department of the State Tax Service in Kyiv against the decision of the Kyiv District Administrative Court dated May 1, 2024, and the ruling of the Sixth Administrative Court of Appeal dated January 8, 2026, in case No. 320/18031/23 concerning the claim of a limited liability company against the Main Department of the State Tax Service in Kyiv to recognize as unlawful and cancel the tax notice-decision.

Circumstances of the case

The taxpayer, as a lessee of a communal land plot, submitted an amended land tax declaration for 2022, reducing the rent obligations for March–May 2022 to zero, citing the benefit defined in subparagraph 69.14 of paragraph 69 of subsection 10 of section XX of the Tax Code of Ukraine (exemption from rent payment in territories where combat operations took place).

The tax authority, after a desk audit, recognized the amended declaration as unreliable because the Cabinet of Ministers of Ukraine had not approved the corresponding list of territories at that time. The control body did not consider the order of the Ministry for the Reintegration of Temporarily Occupied Territories of Ukraine dated December 22, 2022, No. 309, which approved such a list and according to which Kyiv was considered a combat zone during March–May 2022, as a valid basis for applying the benefit. Therefore, based on the audit results, a tax notice-decision was issued to charge additional rent and penalties.

The Kyiv District Administrative Court, by a decision upheld by the Sixth Administrative Court of Appeal, satisfied the claim and canceled the contested tax notice-decision. The courts of first and appeal instances concluded that the provisions of subparagraph 69.14 of paragraph 69 of subsection 10 of section XX of the Tax Code of Ukraine exempt taxpayers from the obligation to accrue and pay rent for land plots located in territories where combat operations are or were conducted.

The courts emphasized that this right to the benefit arises directly from the provisions of the Tax Code of Ukraine and does not depend on whether the Cabinet of Ministers has defined the corresponding list of territories.

A separate basis for satisfying the claim was also the fact that the Kyiv City Council, as a local self-government body acting within its powers, established a zero rent rate, which gave the taxpayer an unconditional right to adjust tax obligations by submitting amended reports.

The Supreme Court dismissed the cassation appeal and left the contested court decisions unchanged.

Court's assessment

Subparagraph 69.14 of paragraph 69 of subsection 10 of section XX of the Tax Code of Ukraine directly establishes exemption from accrual and payment of rent for land plots located in territories where combat operations took place. The absence of a formally approved list by the Cabinet of Ministers of Ukraine cannot deprive the taxpayer of the right to the benefit, as the state cannot invoke its own inaction as a reason to worsen the taxpayer's position.

The order of the Ministry for the Reintegration of Temporarily Occupied Territories of Ukraine dated December 22, 2022, No. 309, issued pursuant to the Cabinet of Ministers resolution dated December 6, 2022, No. 1364 "Some issues of forming the list of territories where combat operations are (were) conducted or temporarily occupied by the Russian Federation," is an act that defines the list of territories and has legal force for the purposes of applying tax benefits. In addition, the Kyiv City Council, by decision No. 5449/5490 dated September 13, 2022, established a zero rent rate for communal land plots for the period from March 1 to May 31, 2022, which is also an independent basis for adjusting tax obligations.

Therefore, the taxpayer has the right to exemption from rent payment for land in territories where combat operations took place, even if there is no list directly approved by the Cabinet of Ministers, provided that such a list is defined by an authorized body in the manner established by the Cabinet of Ministers, as well as in the case of establishing a zero rate by a local self-government body.

The Supreme Court rejected the tax authority's references to explanatory letters from ministries as having a recommendatory nature and incapable of narrowing the scope of benefits directly established by the Tax Code of Ukraine.

Supreme Court ruling dated May 21, 2026, in case No. 320/18031/23.

Subscribe to our Telegram channel t.me/sudua and to Google News SUD.UA, as well as to our VIBER and WhatsApp pages on Facebook and Instagram to stay informed about the most important events.