The Ministry of Finance of Ukraine has clarified the algorithm for calculating the minimum tax liability for land

In response to a request from the State Tax Service of Ukraine, the Ministry of Finance provided clarifications regarding the calculation of the minimum tax liability (MTL).

The key factor in the calculation is the actual period of ownership or use of the land. If the owner or user of the land changes during the calendar year (in particular, under lease, sublease or emphyteusis), the MPZ is distributed between them in proportion to the time of use.

That is, the first land user pays the MRP for the period from January 1 to the month when the right ceased, and the new one - starting from the month of acquiring the right to the plot.

In this case, the amount of the MPZ is included in the total tax liability of each participant separately, in proportion to the period of actual ownership or use of the land plot.

"Therefore, the minimum annual amount of the MPZ, determined by the provisions of the Tax Code of Ukraine, is subject to adjustment depending on the number of months of actual use of the land. This allows for a more accurate distribution of the tax burden between payers and avoid accrual of liabilities for periods when the land plot was not actually in their use," the explanation says.

The State Tax Service of Ukraine also reminded that according to the provisions of the Tax Code of Ukraine, the minimum annual amount of the MPZ is currently not less than UAH 700 per 1 hectare in general and not less than UAH 1,400 per 1 hectare for areas where arable land accounts for more than 50%.