When you will have to pay tax for selling potatoes and tomatoes from your garden
In Ukraine, individuals can sell their own agricultural products without paying tax, but only if they comply with the requirements of the Tax Code of Ukraine. The law defines the cases when such income is not included in taxable income and sets annual limits, after exceeding which there is an obligation to file a declaration and pay tax.
According to subparagraph 165.1.24 of paragraph 165.1 of article 165 of the Tax Code of Ukraine, income received from the sale of own agricultural products is not included in taxable income if such products were grown, fattened, caught, harvested, manufactured, or processed directly by the individual on land plots provided for:
- horticulture;
- construction and maintenance of a residential house, household buildings and structures (homestead plots);
- individual dacha construction;
- personal farming;
- land shares (plots) allocated in kind.
Income from the sale of own crop products is not taxed if their total amount during the year does not exceed the legal threshold, which is defined as 12 times the minimum wage established on January 1 of the reporting year. If this limit is exceeded, the individual is obliged to declare the income and pay tax on the excess amount.
To confirm the right to apply the exemption when selling products, the individual submits to the tax agent a certificate of ownership of land plots with the appropriate designated purpose. Such a certificate is issued by local self-government bodies at the taxpayer's tax address within five working days upon a written application.
Regarding livestock products (groups 1–5, 15, 16, and 41 of the UKT ZED), income from their sale is also not included in taxable income within the annual limit, which is 50 minimum wages established on January 1 of the reporting year.
To apply the exemption, the taxpayer must confirm that the products were grown, bred, or fattened directly by them. Such confirmation is provided in the form of a certificate issued by the local self-government body at the place of the tax address.
If the established limits are exceeded or confirmation documents are missing, income from the sale of agricultural products is subject to taxation on general grounds in accordance with the Tax Code of Ukraine.
Subscribe to our Telegram channel t.me/sudua and to Google News SUD.UA, as well as to our VIBER and WhatsApp, our page on Facebook and on Instagram to stay informed about the most important events.
