SFS cancels debt against tax and rent on land in ATO territory

Tax issues: Other issues Kyiv

Subject of complaint: Main Department of State Fiscal Service in Donetsk Oblast (SFS Donetsk Oblast)
Complaint in brief: The Complainant, company specialized in producing of materials from coated sheet metal, lodged a complaint with the BOC against the Donetsk Oblast SFS for what it considered an unlawful tax debt for supposed failure to pay the land tax and rent for land plots located in Donetsk Oblast. Due to the start of anti-terrorist operation (ATO) in Luhansk and Donetsk Oblasts, the Complainant was forced to abandon two leased land plots with all manufacturing facilities. He registered in Kyiv as an enterprise that had moved from occupied territory. In March 2016, however, the Complainant had found out a tax debt for failing to pay land tax and rent for land plots located in ATO territory. Complainant rightly observed, that debt accrual violated the Law “On temporary measures for the duration of the Anti-Terrorist Operation” under which the Complainant was exempt from payment of land tax and rent for lands located in the occupied territory. 
Action taken: Having reviewed the case, the BOC investigator discovered that a range of companies who moved from ATO territory had experienced similar problem. In opinion of the tax authorities, any exemption from taxes can only be granted by the Tax Code and cannot be regulated by any other law. This practice by tax authorities was debated at Ministry of Finance and in the Verkhovna Rada more than once, but agreement was never achieved. Taking into account the ongoing work on making amendments to the Tax Code of Ukraine, the BOC addressed the Ministry of Finance with suggestion to settle the corresponding issues with land tax and rent for land plots by amendments to the Tax Code.
Result achieved: On December 21, the Verkhovna Rada of Ukraine agreed the amended Tax Code, providing full exemption of enterprises from payment of land tax and rent for land located in the temporarily occupied territory. Amendments also foresee that accrued and paid during the period of ATO amounts of the land tax are considered overpaid and must be repaid. 

Next case:: Prosecutor’s Office activated case regarding return of property to private entrepreneurs