Within the project "Supporting agricultural MSMEs affected by active hostilities or Russia’s temporary occupation" implemented by the Ukrainian Agri Council with the support of the USAID AGRO Program, agricultural producers affected by hostilities receive free legal advice on a daily basis.
By calling the hotline +38 067 503 19 08, the UAC experts provide answers to various questions related to taxes, among other things. This allows farmers to understand the law and make the right informed decisions aimed at improving their financial situation for further business operations.
Recently, the legal advice line received a question: "Should an agricultural producer of the 4th group of the single tax, whose share of own agricultural production for the previous tax (reporting) year (2023) is less than 75 percent, pass to the general taxation system from 2024?"
The UAC experts explain that such taxpayers may not be passed to the general system and remain single taxpayers of the 4th group if such a decrease in the share of their own agricultural production was due to force majeure circumstances, as evidenced by the relevant decision of the regional council, and such a taxpayer is included by the relevant council in the list of business entities affected by force majeure circumstances.
In the absence of such a decision of the regional council and/or failure to include it in the relevant list, the agricultural producer must be passed to the general taxation system
"In accordance with the second paragraph of subparagraph 298.8.4 of the Tax Code, if the share of agricultural production does not exceed 75% due to force majeure circumstances, such a taxpayer is not a subject to the requirement to pay taxes in the next tax year on a general basis. To confirm the status of a single tax payer, such taxpayers should submit a tax return together with a decision of the Verkhovna Rada of the Autonomous Republic of Crimea, regional councils on the existence of force majeure circumstances and a list of business entities affected by such circumstances," the lawyers explained.
That is why it is recommended that farmers whose share of their own agricultural production in 2023 is less than 75% should apply to the regional council (as well as the Department of Agriculture of the relevant regional state administration) with a statement on the existence of force majeure circumstances in the region in which such a taxpayer operates and a request to include their enterprise in the list of business entities affected by force majeure circumstances (conduct of hostilities on its land plots or their temporary occupation by the armed forces of the Russian Federation, other force majeure circumstances).
As an annex to this consultation, the experts provided an example of a letter of request from a company to the authorities. It is available for download here.
As a rule, the letter of request should be accompanied by documents confirming
- the amount of own agricultural production for the relevant year;
- a description of the consequences of force majeure circumstances at the enterprise, as well as available supporting documents (acts of lack of access to fields, destruction/damage of equipment, employees being on military service, etc.)
A clear list of supporting documents is not regulated by the current legislation, so each region can independently determine a sufficient list of documents.
That is why the UAC experts recommend contacting the agricultural departments of the respective regional military administrations to clarify the procedure for submitting these documents and obtain additional clarifications.
Telephone numbers of the Agricultural Departments of the Regional State Administrations in the regions that are currently in the area of military operations or temporary occupation:
- Kharkiv Regional State Administration: (057) 705-21-69, (057) 705-21-62
- Sumy Regional State Administration: (0542) 77-15-37, (0542) 77-02-70
- Chernihiv Regional State Administration: (0462) 77-44-88
- Luhansk Regional Military District: (099) 402-02-29
- Donetsk Regional State Administration: (063) 051-80-59
- Zaporizhzhia Regional State Administration: (061) 239-04-89
- Kherson Regional State Administration: 0 (800) 33-09-51
- Mykolaiv Regional State Administration: (0512) 37-78-40
***
This project is made possible by the support of the American people through the United States Agency for International Development (USAID) under the USAID Agriculture Growing Rural Opportunities Activity in Ukraine (AGRO), which is implemented by Chemonics International. The opinions of the authors do not necessarily reflect the official views of USAID or the U.S. Government.
