Did Not Own Land for the Whole Year: How the Minimum Tax Liability Is Calculated in This Case
When determining the minimum tax liability, the actual period of ownership or use of the land plot during the year is taken into account.
As reported by the Ministry of Finance in response to a request from the State Tax Service, in the event of a change of owner or user of the land plot during the calendar year (including under lease, sublease, or emphyteusis agreements), the amount of the minimum tax liability is distributed between the parties according to the period of actual use of the land.
Thus, the person who lost the right of ownership or use of the land plot pays the minimum tax liability for the period from January 1 to the month of termination of such right. At the same time, the new owner or user accounts for the minimum tax liability starting from the month of acquiring the respective right.
The tax liability of each taxpayer is determined separately and calculated proportionally to the number of months of actual ownership or use of the land plot.
Therefore, the minimum annual amount of the minimum tax liability provided by the Tax Code of Ukraine is subject to adjustment depending on the duration of use of the land plot during the year. This approach ensures a fairer distribution of the tax burden and prevents the accrual of liabilities for periods when the land was not actually used by the taxpayer.
According to the Tax Code of Ukraine, the minimum annual amount of the minimum tax liability is:
- not less than 700 hryvnias per 1 hectare of land plot;
- not less than 1400 hryvnias per 1 hectare for land plots where the share of arable land exceeds 50%.
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