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Tax obligations on VAT for sublease rent of state or communal land plots

  • Tax obligations for VAT arise when receiving rent for sublease agreements of state or municipal land plots
  • According to Ukrainian law, landlords of state-owned land plots are executive authorities, while landlords of municipal land plots are local councils
  • Tenants of land plots have the right to possess and use the land according to lease agreements
  • Land users are subject to paying rent for state or municipal land plots under lease agreements
  • Transactions for leasing (subleasing) state or municipal land plots are exempt from VAT if payments are made directly to the relevant budget accounts
  • Subleasing of land plots is allowed without changing the purpose if agreed upon in the lease contract or with written consent from the landlord
  • Rent for sublease agreements of state or municipal land plots is considered a service transaction subject to VAT
  • Rent payments for sublease agreements are not directly transferred to the budget but are credited to the taxpayer’s bank account and are subject to a 20% VAT tax rate.


Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.


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