This principle was reaffirmed in the Court’s resolution of February 5, 2025, in case No. 500/6132/23 (proceedings No. K/990/32384/24).
1. Case Background
- Plaintiff: An individual entrepreneur owning non-residential buildings, greenhouses, and auxiliary structures.
- Dispute: The State Tax Service had issued tax notices for real estate other than land, claiming over UAH 8 million in liabilities for 2018–2022.
- Plaintiff’s Argument: The facilities were used for agricultural purposes and therefore qualified for certain tax benefits under the Tax Code of Ukraine.
2. Court Decisions
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Court of First Instance
- Partially canceled the tax notices-decisions.
- Accepted the argument that non-leased agricultural buildings do not incur real estate tax.
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Administrative Court of Appeal
- Left the first-instance decision unchanged.
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Supreme Court
- Dismissed the cassation appeal, upholding the lower courts’ rulings.
3. Key Legal Provisions
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Subparagraph “g” of subparagraph 266.2.2 of clause 266.2 of Article 266 of the Tax Code:
Establishes tax exemptions for agricultural buildings that are not used for commercial rental or loan. -
Clause 266.7:
Details additional criteria for applying real estate tax benefits.
Essential Criterion:
Buildings must be “agricultural” in nature and not transferred for lease, rent, or other commercial forms of use.
4. Practical Implications
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Tax Exemption
- Non-residential buildings exclusively used in agriculture—and not leased—are exempt from real estate tax obligations.
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Burden of Proof
- Owners must demonstrate that the buildings are used purely for agricultural activities and have not been rented or loaned out.
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Consistency with Prior Rulings
- The Supreme Court’s conclusion aligns with its May 21, 2024 resolution (case No. 600/5153/23-a), which also affirmed the exemption for non-residential agricultural properties not utilized commercially.
Conclusion
Under Ukrainian law, non-residential agricultural buildings that remain unleased do not generate real estate tax liabilities. The Supreme Court’s recent decision underscores the importance of both the property’s agricultural use and lack of commercial exploitation to qualify for this exemption.
