Payment of Land Tax, Minimum Tax Liability and Environmental Tax during Martial Law

On March 15, 2022, the Verkhovna Rada of Ukraine adopted the Law of Ukraine “On Amendments to the Tax Code of Ukraine and Other Legislative Acts of Ukraine Concerning Martial Law” No. 2120-IX, which entered into force on March 17, 2022. The Law establishes the peculiarities of charging for land, the minimum tax liability for land and the payment of environmental tax.

Regarding land fees:

Land fee is a mandatory payment, part of the property tax, which is collected in the form of land tax or rent for land plots of state and communal property.

Temporarily for the period from March 1, 2022 to December 31 of the year following the year in which the martial law is terminated or abolished, as established by the Decree of the President of Ukraine of February 24, 2022 № 64/2022 “On the Imposition of Martial Law in Ukraine”, land fee (land tax and rent for state and communal land plots) shall not be accrued and paid in cases where:

1) land plots (land shares, units), owned or used (including on lease terms) by natural or legal persons, are located in the territories where hostilities are being conducted (were conducted);

2) land plots (land shares, units), owned or used (including on lease terms) by natural or legal persons, are located in the territories temporarily occupied by the armed forces of the Russian Federation;

3) land plots (land shares, units) are determined by the regional military administrations as littered with explosive objects and/or on which fortifications are placed.

Regarding the payment of the minimum tax liability for land:

Minimum tax liability is the minimum value of the tax liability for the payment of taxes, fees, charges, the control of which is entrusted to the supervisory authorities in relation to:

• ownership and/or use (lease, sublease, emphyteusis, permanent use) of land classified as agricultural land and/or
• production and sale of own agricultural products.

Temporarily for 2022 and 2023 tax (reporting) years, the total minimum tax liability for land shall not be accrued and paid in cases where:

1) land plots are located in the territories where hostilities are being conducted (were conducted);

2) land plots are located in the territories temporarily occupied by the armed forces of the Russian Federation;

3) land plots are determined by regional military administrations as littered with explosive objects and/or on which fortifications are placed.

Regarding the payment of environmental tax:

Environmental tax is a mandatory payment, which is paid from the actual amounts of various emissions, discharges, and waste disposal in the environment.

Temporarily, for the 2022 tax (reporting) year, no environmental tax shall be charged or paid on taxable objects located in the territories where hostilities are being conducted (were conducted) or in the territories temporarily occupied by the armed forces of the Russian Federation.

Please note that the list of territories where hostilities are being conducted (were conducted) or temporarily occupied by the armed forces of the Russian Federation will be determined by a separate order of the Cabinet of Ministers of Ukraine.

At the same time, the Chief Scientific and Expert Department of the Verkhovna Rada of Ukraine noted that the Law No. 2120-IX of March 15, 2022 does not provide for exemption from real estate tax, other than the land, and transport tax, despite the consolidation of relevant preferences in relation to the payment for the land.