By its Resolution No. 485 as of April 30, 2024, the Government amended Resolution No. 1364 of the Cabinet of Ministers of Ukraine and resolved a regulatory conflict that prevented farmers conducting business in the “territories of active hostilities where state electronic information resources operate” from receiving the benefits provided for by tax legislation.

According to the Tax Code of Ukraine, land plots located in the “territories of active hostilities” are not paid and accrued with land payments (land tax and rent for state and municipal land plots), the 4th group of the single tax and the minimal tax liability until the end of hostilities.

At the same time, the previous version of the Resolution included a list of “territories of active hostilities” and a separate list of “territories of active hostilities where state electronic information resources operate”, which is not provided for by tax legislation.

As a result, many frontline villages of Donetsk, Kharkiv, Zaporizhzhia and other regions could not use tax preferences. That means, the territories where active hostilities are taking place and there is even a threat of their occupation, but where state electronic information resources are still functioning, were obliged, as a general rule, to pay land taxes.

Experts of the UAC, which, with the support of the USAID Agriculture Growing Rural Opportunities Activity in Ukraine (AGRO), is implementing the project “Supporting agricultural MSMEs affected by active hostilities or Russia’s temporary occupation” have repeatedly drawn attention to the need to amend the Resolution and resolve the above problem and joined the development and advocacy of the relevant changes.

The new version of the Resolution equates the “territories of active hostilities where state electronic information resources operate” with the “territories of active hostilities” for tax purposes and, accordingly, extends the tax preferences provided for by law to such territories.

Currently, the area of agricultural land in such areas is more than 130,000 hectares. Therefore, the exemption from land and single taxes, as well as the minimal tax liability, will allow farmers from the frontline areas to save about UAH 100 million and use these funds to restore their business activities.

The UAC welcomes the Government's adoption of the above changes and expresses its gratitude to the Ministry of Reintegration, the Ministry of Agrarian Policy and the State Tax Service for their constructive position and willingness to hear and solve the problems of the agricultural business in the frontline areas.

We remind that the UAC, with the support of the USAID Agriculture Growing Rural Opportunities Activity in Ukraine (AGRO), is implementing a joint project to provide legal and other expert support to agricultural producers affected by hostilities or temporary occupation by the Russian Federation.

Thanks to the project, affected agricultural producers will receive individualized advice on land, agrarian, tax legislation, etc. For prompt legal support, please contact the hotline at +38 067 503 19 08.

Also, join the creation of the Interactive map of the Ukrainian agricultural sector destructions at https://www.agrirecovery.com.ua.