The Ukrainian AgriCouncil together with the Ukrainian Agrarian Business Club Association addressed the Cabinet of Ministers of Ukraine and the Ministry of Agrarian Policy and Food of Ukraine regarding some aspects of agricultural producers taxation in the territories of Ukraine affected by Russian troops.

"In accordance with sub-clause 69.14 of clause 69 of subsection 10 of the Transitional Provisions of the Tax Code of Ukraine for the period from March 1 to December 31, 2022 of the following the year in which the martial law was terminated or abolished, no land fee is charged or paid tax and rent (for land plots of state and communal property) for land plots (land shares) that are located in the territories where hostilities are being conducted (conducted) or in the territories temporarily occupied by the armed forces of Russia and are owned or used, including on lease, by individuals or legal entities, as well as for land plots (land shares), identified by regional military administrations as littered with explosives and/or on which there are fortifications," is mentioned in the statement.

The list of territories where hostilities are being (were) conducted or temporarily occupied by Russian armed forces is determined by the Cabinet of Ministers of Ukraine. "However, the implementation of this norm in practice is impossible due to the fact that the Cabinet of Ministers of Ukraine has not yet approved the list of relevant territories," the associations explain.

At the same time, the Ministry of Reintegration of the Temporarily Occupied Territories of Ukraine by Order of April 25, 2022 № 75 approved the List of Territorial Communities Located in the Area of ​​hostilities, temporarily occupied or surrounded (blocked) as of April 25 2022.

However, this List cannot be used for the purposes of the Transitional Provisions of the Tax Code of Ukraine (sub-clause 69.14 of clause 69 of subsection 10), as the list of territories is approved by the relevant Ministry and not the Cabinet of Ministers of Ukraine as is required by the Tax Code. In addition, the order defines only the list of territories on which, as of the date of approval of the order, hostilities are taking place and does not specify the list of territories in which hostilities were previously conducted, as it was provided by the above-mentioned subclause of the Tax Code of Ukraine.

As a result, both taxpayers in the temporarily occupied territories and taxpayers who are agricultural producers and work at the controlled territories of Ukraine but whose farms have been destroyed, or damaged as a result of recent hostilities are forced to pay taxes.

Given the above, the agrarian community calls for as soon as possible to approve the list of territories where hostilities (were) are taking place and territories temporarily occupied by Russian armed forces for proper taxation of agricultural producers in these territories.