The Ukrainian Agri Council has repeatedly emphasized the need to amend the Tax Code in terms of taxation of agricultural cooperatives to avoid double taxation of their members. UAC has actively participated in the development and support of the draft law No. 4457-1 of 22.12.2020.

On February 21, the Ministry of Agrarian Policy and Food of Ukraine presented draft law No. 4457 and its alternative No. 4457-1 at a meeting of the Verkhovna Rada Committee on Ukraine's EU Integration.

It is important to note that the alternative draft law No. 4457-1 contains similar provisions to the main draft law, but at the same time it regulates the issue of avoidance of double taxation in agricultural cooperatives by allowing cooperatives to deduct patronage dividends of the taxable income. Representatives of the Ministry of Agrarian Policy emphasized this point as important.

There is a law on agricultural cooperation in Ukraine that provides the payment of patronage dividends to cooperative members. However, there is no such concept in the Tax Code. In addition, under the current legislation, when a cooperative earns profits, such profits are taxed both at the level of the cooperative and at the level of the cooperative members after the payment of dividends, which leads to double taxation.

IN the end of the meeting, the Draft Law No. 4457-1 and the main law No. 4457 were supported by the members of the Verkhovna Rada Committee on Ukraine's EU Integration and recognized as not contradicting the Association Agreement, the law of the European Union and/or Ukraine's international legal obligations.

We look forward to a soon vote on Draft Law No. 4457-1 in the Verkhovna Rada, as the regulation of avoidance of double taxation in agricultural cooperatives is extremely important for the further development of domestic agricultural cooperatives.