Military duty – legal aspect – questions and answers

Since 2015, transactions with movable and immovable property (purchase and sale agreements, donations, registration of inheritance) have been subject to an additional tax - Military Duty. In this article, we have tried to summarize the most popular questions of customers and answer them.
1 Is property (income) received by purchase, acceptance as a gift or by inheritance in 2014 taxable?
- No, such property (income) is not taxable.
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2. Are legal entities subject to military duty?
- No. Payers of military duty are individuals (residents and non-residents)
3. What is the military duty rate? From what amount should it be calculated?
- The military levy rate is 1.5%. It is calculated from the contract price, but not lower than the estimated value of such an object (military levy is calculated from the larger amount). For example, when concluding a purchase and sale agreement, two values ​​are indicated in the agreement. The first is the sales price (i.e. how much you sell the property for). The second is the estimated value of the property provided by the subject of the valuation activity (according to the valuation report). The first (sales price) - 800,000 UAH. The second (estimated value of the subject of the valuation activity) - 700,000 UAH. Military levy = 800,000 * 1.5/100 = 12,000 UAH.
4 Are resident heirs of the 1st degree of kinship subject to military levy taxed?
- No.
5. In 2017, I purchased a land plot under a purchase and sale agreement. Now I intend to sell this land plot. Is it necessary to pay the Military Levy in this case?
- Yes. The land plot has been in your ownership for less than 3 years and is subject to taxation (5%). According to the Tax Code of Ukraine, where transactions with movable and immovable property are subject to taxation, the Military Levy (1.5%) arises, respectively.
6. At the beginning of 2017, I re-registered the homestead from my father. Now I want to give this property to my daughter. In this case, is the gift agreement subject to the Military Levy?
- No.
7. Are there tax benefits and for which categories of persons? Are there any benefits for people who have lost close relatives or property in the ATO zone and/or in the territory where anti-terrorist operations are being conducted?
- This question is asked repeatedly and for each specific question we clarify the information in the State Fiscal Service of Ukraine. Unfortunately, the answer is the same: no benefits are provided for anyone in paying the Military Duty!
8. When and where should the Military Duty be paid?
- The Military Duty is transferred to the accounts of the State Budget. Payment details are available on the official websites of the State Fiscal Service in your city. Payment is made at the time of the notarial act (purchase and sale agreement, Gift agreement, registration of inheritance). You can also ask for payment details from the district State Tax Inspectorates and ask for help in calculating the military levy correctly, as well as from a private or public notary with whom you will perform a notarial act.
9. What liability does tax agents have for failure to pay the Military Levy?
- For failure to charge, fail to receive or fail to pay the Military Levy, tax agents are subject to financial and administrative liability, a penalty. For failure to charge, fail to receive or fail to pay the Military Levy by taxpayers, including a tax agent, before or during the payment of income in favor of another taxpayer - a fine of 25% of the amount of tax payable to the budget. The same actions are committed repeatedly (within 1095 days) - a fine of 50% of the amount of tax payable to the budget. The same actions are committed three or more times (within 1095 days) - a fine of 75% of the amount of tax payable to the budget.
If you have any questions, you can contact our specialists for paid Legal Consultation on Real Estate.