The Committee on Finance, Tax and Customs Policy of the Verkhovna Rada of Ukraine considered the amendments proposed by the UAC, in particular regarding a minimal tax liability, and took them into account in the text of the draft bill 5600 “On Amendments to the Tax Code of Ukraine and Some Legislative Acts of Ukraine to ensure the balance of budget revenues”.

In particular, the minimal tax liability (MTL) provides:

1. The introduction of MTL has been postponed for one year. If the original version provided for the first payment of MTL during 2021, then according to the amendments to the second reading, the MTL will be charged from 2022. That means MTL for 2022 will be paid by agricultural producers in 2023.
2. Also, in the draft bill №5600 before the second reading there are transitional provisions on the usage of the coefficient in determining the MTL. The ratio was reduced from 0.05 to 0.04 of the nominative monetary evaluation.
3. It is envisaged to include 20% of the rent for land plots leased from legal entities (including plots of state or communal property) to MTL. Instead, in the original version, the rent for private lands of legal entities was not included at all, and the amount of rent for state and communal land was fully included, which could lead to manipulations with the MTL.
4. The established procedure for including paid taxes to the MTL account differentially between agricultural producers and non-agricultural ones.
5. MTL will not be accrued at all to individuals who own land plots in the right of ownership or usage, but in the case when these lands as of January 1, 2022 were located within the settlements. By the draft bill №5600, in the first reading, individuals who owned up to 0.5 hectare of agricultural land were free of MTL payment. But the legislators wrote the norm in such a way that if an individual had land plots in a total amount of 0.51 hectares, he was obliged to calculate the MTL for the entire area of ​​the land plot, but not for 0.01 hectare. It was removed before the second reading.
6. The benefit for exemption from personal income tax on income from the sale of home-grown products will depend on the amount of income received and will be provided if the amount of income does not exceed 12 times of a minimum wage. That means, a benefit on incomes’ release (received from 2 hectares) was replaced by a benefit that has a monetary expression of 12 minimum wage income. It should be noted that in the first reading, the exemption from personal income tax depended on the size of the land plot and was offered from all revenues from 0.5 ha of land in use.

ATTENTION!

On Friday, September 17, the UAC Deputy Chairman Mykhailo Sokolov will hold a webinar for all agricultural producers, during which he will talk in details about the changes that are being prepared for the second reading of the draft bill №5600, in particular in the agricultural sector.

Venue: ZOOM platform

Time: 3:00 PM

Registration is nesessary: https://us02web.zoom.us/meeting/register/tZckf-2grz4jG9fy8DPPK7v4n14NvTy1cQZj

After registration, you will receive an e-mail confirming your participation in the webinar.