LETTER OF THE STATE TAX SERVICE OF UKRAINE

of November 20, 2012 No. 2723/0/141-12/C/17-3214

About consideration of the address

The State Tax Service of Ukraine considered your address concerning payment for the earth from physical persons and reports.

Land relations in Ukraine are governed by the Land code of Ukraine of 25.10.2001 No. 2768-III (further - the Land code), and collection of payment for the earth - the Tax code of Ukraine of 02.12.2010 No. 2755-VI (further - the Tax code).

According to article 269 of the Tax Code taxpayers are owners of the parcels of land, land shares (shares) and land users.

In article 270 of the Tax Code it is noted that the taxation objects are the parcels of land which are in property or use, and land shares (shares) which are in property.

By Article 35 of the Land code it is determined that citizens - members of gardening society have the right to privatize the parcel of land, such privatization is performed without the consent to that of other members of this society.

The earth public of gardening society are its property, the parcels of land occupied with protective strips, roads, drives, buildings and constructions and other common use facilities belong to them. Use of the parcels of land of gardening societies is performed according to the law and charters of these societies.

According to Article 116 of the Land code citizens and legal entities acquire the property right and rights to use by the parcels of land from lands of the state-owned or municipal property according to the decision of executive bodies or local government bodies within the powers determined by the Land code.

According to article 281 of the Tax Code are exempted from the tax discharge: disabled people of the first and second group, physical persons who bring up three and more children aged up to 18 years, pensioners (on age), veterans of war and persons on whom operation of the Law of Ukraine "On the status of veterans of war, guarantees of their social protection", the physical persons recognized by the law persons who suffered as a result of the Chernobyl catastrophic crash expatiates.

The exemption of tax for the parcels of land provided for the corresponding category of physical persons by Item 281.1 of this Article extends to one parcel of land by each type of use within limit rates, in particular, for conducting gardening - no more than hectare 0,12.

The bases for provision of tax benefits are features which characterize certain group of taxpayers, type of their activities, the taxation object or nature and social significance of the expenses (Item 30.2 of article 30 of the Tax Code) performed by them.

When the parcels of land are privatized by citizens - members of gardening society and each citizen received the document which certifies the right to the parcel of land, such citizens, except those to whom privileges on the land tax according to article 281 of the Tax Code are provided, independently pay the land tax to the budget. The land tax in the budget will be paid for the parcels of land public which are in property of society in society.

In article 286 of the Tax Code it is noted that the basis for charge of the land tax are data of the state land cadastre.

According to Article 126 of the Land code the document which certifies the property right or right to use by the earth is the state act on the property right to the parcel of land and the state act to the right of permanent use of the parcel of land.

Considering above-mentioned if the owner of land or the user of the parcels of land provided for conducting gardening is gardening society and members of society did not draw up the right to the parcel of land, then such society and will be payer of the land tax in the budget (including the parcels of land public).

If the physical person has the parcel of land which is provided for conducting gardening in property, and this site makes sure the state act on the property right, then in this case specified person shall pay independently the land tax, or it has privilege on the land tax, according to article 281 of the Tax Code.

At the same time we report, by subitem 284.1 of Article 284 it is determined that the Verkhovna Rada of the Autonomous Republic of Crimea, regional, city, settlement and village councils can establish privileges of rather land tax which is paid in the corresponding territory: partial release for certain term, reduction of the amount of the land tax only at the expense of means which are enlisted in the corresponding local budgets.

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