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22-07-2016

Maryna Tomash about the procedure of paying real estate tax in 2016

LUXURY STARTS FROM 300 METERS

Real Estate Tax: payment procedure in 2016

Maryna Tomash, a Counsel at Spenser & Kauffmann, Attorneys at Law, in her special interview for Zakon & Business, a newspaper

According to clause 266.7.2 of the Tax Code of Ukraine, the regulatory bodies were to have sent to the citizens by July 1 tax notices-decisions on payment of the real estate tax for 2015. What you should know about this tax to avoid making payments exceeding the extent as provided for in the applicable law?

Tax Rate: From 2 to 0

As a general rule, depending on the location (zone) and the types of real estate, the tax rate for the residential or non-residential real estate shall be set by a respective decision of a village, town or city council to the extent of up to three percent of the minimum wage established by the applicable laws as of January 1 of the relevant reporting (fiscal) year per 1 sq. m. of the tax base.

However, in fact, the tax rate to be specified in tax notices-decisions this year should not exceed 2% of the minimum wage. First, as expressly provided for in the transitional provisions (clause 32 of Subsection 10 of Section XX of the Tax Code), the the tax rate for the non-residential real property for 2015 should not exceed 1% of the minimum wage. A ceiling interest rate to the extent of 2% of the minimum wage was applicable to the residential real property until the beginning of 2016 (increased with the effect from January 1 by virtue of Law N 909-VIII dated December 24, 2015). Therefore, the local councils were unable, even in theoretical terms, establish a higher tax rate.

However in certain cases, when a body of local-self-government did not decide to introduce relevant local taxes and fees, in 2015 even the zero rate was applied because according to clause 12.3.5 of the Tax Code such taxes shall be payable at minimum tax rates.

The full text of the article can be found here.

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