Land Tax: The State Tax Service Explained When an Extract of the Normative Monetary Valuation of Land Is Needed
The Tax Service reminded land fee payers when exactly it is necessary to submit to the controlling authority an extract from the technical documentation on the normative monetary valuation (NMV) of a land plot.
According to paragraph 286.2 of article 286 of the Tax Code of Ukraine, such an extract is submitted in two cases:
- when submitting the first declaration — that is, at the actual start of activity as a land fee payer;
- in case of approval of a new normative monetary valuation of the land plot.
At the same time, landowners and users can obtain extracts from the NMV an unlimited number of times. However, for the calculation of tax liabilities, only those valuation indicators that have come into force in accordance with the legislation are taken into account.
When the new valuation changes the amount of land tax
New indicators of the normative monetary valuation are applied to determine the land fee only from the moment they come into force.
The procedure for the entry into force of decisions by local self-government bodies regarding the establishment of NMV is defined by article 271 of the Tax Code of Ukraine.
Local councils:
- adopt decisions on the establishment or updating of the normative monetary valuation;
- must publish such decisions by July 15 of the year preceding the budget period in which the new valuation is planned to be applied.
If the decision is published later than the established deadline, the new NMV may be applied no earlier than the beginning of the budget period following the planned one.
In which cases exceptions apply
The general rules regarding the entry into force of decisions by local councils do not apply to certain land plots.
These include:
- state and communal land plots outside settlements that are leased;
- lands for which the normative monetary valuation was previously not conducted or not properly approved, if the new NMV of such lands exceeds the valuation of the corresponding area of arable land in the region.
In such cases, the council’s decision:
- is published no later than 10 days from the date of its adoption;
- is applied from the first day of the second month after the month of the decision’s adoption.
The State Tax Service noted that payers sometimes use extracts from the normative monetary valuation formed according to the Methodology approved by the Cabinet of Ministers of Ukraine Resolution No. 1147 dated November 3, 2021, even if after the entry into force of this Methodology the local council did not adopt or publish a decision approving new technical documentation on NMV.
Such application may lead to both underestimation and overestimation of tax liabilities.
At the same time, paragraph 4 of Resolution No. 1147 provides that technical documentation on normative monetary valuation approved earlier in accordance with the requirements of the Tax Code of Ukraine remains valid until the start of application of a new decision of the respective council approving updated technical documentation.
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