A New Land Tax for Farmers Has Come into Effect

From January 1, 2023, Ukraine has earned a minimum tax liability for land. The relevant law was adopted back in 2021, but it has entered into force only now. Farmers will be required to pay taxes for 2022.

A minimum tax liability is charged for the ownership and use of agricultural land. The law applies to farmers who cultivate land plots outside urban areas, as well as landowners in urban areas, provided that the area of the plot exceeds 0.5 hectares.

In connection with the full-scale war that the terrorist state of the Russian Federation unleashed against Ukraine, the law on the minimum tax liability was amended. Farmers whose lands are located in temporarily occupied territories will not pay tax for 2022. The same applies to landowners whose plots are located in the war zone.

The minimum tax liability includes the following taxes:

• Land tax.

• A tax on income from the sale of crops collected from a particular plot.

• Income tax.

• Military fee.

According to experts, the average tax for 2022 and 2023 will be UAH 1,000 per 1 hectare. In these two years, the tax rate will be 4%. After that, the minimum tax liability rate will increase to 5%, and the estimated amount will be UAH 1,500 per 1 hectare. If an individual who owns the land is not registered as a private entrepreneur, a tax notice will be sent to them with a calculation of the amount of the minimum tax liability. Notifications will be sent to individuals from January 1 to July 1, 2023. If the landowner has not received the appropriate notification, then they are not required to pay land tax.