The Ministry of Finance of Ukraine has officially confirmed that state financial support funds must not reduce the share of agricultural production when calculating eligibility for maintaining or obtaining the status of a single tax payer of the 4th Group.

This applies to all funds received from the state budget that are accounted for as targeted financing or income from assets received free of charge. These amounts are included in the Calculation of Agricultural Share under line 3.1 “Amount of state financial support received from the state budget,” but are excluded from total income when determining the agricultural production share.

The issue was identified by experts of the Ukrainian Agri Council (UAC) based on inquiries from agricultural producers submitted through the legal advisory hotline, which operates within a project supporting affected farmers in partnership with the international humanitarian organization Mercy Corps. Prior to the confirmation of Group 4 single tax payer status, the State Tax Service began systematically rejecting the inclusion of all state support amounts under line 3.1. As a result, the agricultural production share for some enterprises fell below the 75% threshold, creating a risk of being transferred to the general taxation system.

To resolve the issue, UAC experts requested clarification from the Ministry of Economy of Ukraine and received confirmation that the approach of the tax authorities was unlawful (letter No. 7042-05/18987-03 dated February 24, 2026).

Subsequently, the Ministry of Economy addressed the Ministry of Finance with a request to provide an official position. Following the review, the Ministry of Finance confirmed, in its letter No. 11230-09-5/11305 dated April 23, 2026, the validity of the approach under which all amounts of state financial support must be reflected in line 3.1 of the Calculation and do not reduce the agricultural production share.

Thus, all types of state support — including compensation under the “5-7-9” program, per-hectare subsidies, support for cattle maintenance, compensation for domestically produced agricultural machinery, and horticulture grants — must be included in the Calculation and will not reduce the agricultural share.

You can review the official responses from the ministries via the link:
https://drive.google.com/file/d/1-xTJLBIbAy6hSt-msjF2tL5W9kuMR5cb/view?usp=sharing

The Ukrainian Agri Council (UAC) expresses its gratitude to Deputy Minister of Economy, Environment and Agriculture of Ukraine Taras Vysotskyi and Deputy Minister of Finance of Ukraine Svitlana Vorobei for their support in resolving this issue.

We remind that UAC experts continue to provide free consultations to agricultural producers on employee reservation, critical status designation, taxation and accounting, land relations, and participation in state support programs.

To receive a consultation, please submit your request via the online form:
https://forms.gle/v56UzTAsrD9Zrx998

For additional inquiries, please contact the legal advisory hotline at:
+38 067 522-03-43

Background:

Mercy Corps is an international humanitarian organization that operates in more than 40 countries worldwide and provides assistance to people affected by disasters, wars, poverty, and the impacts of climate change.