Changes to Taxation of Newly Established Farms Under Consideration in the Verkhovna Rada

A draft law No. 14179 has been registered in the Verkhovna Rada of Ukraine, aimed at optimizing the taxation procedure for newly established farms, particularly regarding changes in land users.

This is reported by AgroReview

What Changes Does the Draft Law Propose?

The document proposes amendments to the Tax Code of Ukraine concerning the calculation of the minimum tax liability (MTL). The main idea is that if a new user, in the form of a newly established farm, appears for a land plot, the MTL for such a farm will only be calculated after the state registration of the right to use the land plot has been completed. Thus, the calculation of the MTL will begin from the month when this right is officially registered.

Benefits for Farms

The proposed changes will help avoid situations where newly established farms are burdened with tax liabilities before the legal rights to the land are formalized. As a result, new farms will be able to avoid double taxation during the transitional period of land re-registration.

“In the event of a change in the owner of real estate (land plot), the amount of land tax paid by the previous land user may be credited towards future payments of the new user.”

The new draft law aims to improve this mechanism specifically for the procedure of re-registering land to newly established farms, ensuring a fairer calculation of the minimum tax liability and providing support for farmers during the transition of land use rights.