On August 10, the President of Ukraine signed the draft law "On Amendments to the Tax Code of Ukraine and Certain Legislative Acts of Ukraine Concerning the Stimulation of the Establishment and Operation of Family Farms" No. 6490-d of May 18, 2018. The authors of the bill were People's Deputies of the Agrarian and Tax Committees of the Verkhovna Rada Ukraine.
The Ukrainian Stock Breeders Association supported the adoption of the bill from the very beginning, when it was registered in Parliament under No. 6490, because for farmers working in stock breeding, the adoption of this law would mean obtaining additional mechanisms for state support.
What exactly new did the farmers get?
According to the adopted law, a simplified system of taxation, accounting and reporting will be applied to individual entrepreneurs who organized a farm, including a family one.
Such self-employed persons are now payers of the single tax of the fourth group, but on condition that they meet certain criteria, among which:
- being engaged in business exclusively within the farm, registered in accordance with the Law "On Farming";
- being engaged exclusively in breeding, fattening of agricultural products, collection, harvesting, processing of such properly bred or fattened products and its sale;
- implementation of economic activities (except for supplies) at the place of tax address;
- do not use labor of hired persons;
- members of the farm of such an individual are only members of the family of this person in determining part two of Article 3 of the Family Code of Ukraine;
- the area of agricultural land in ownership and / or use, the land of the water fund in the use of members of the farm is at least 2 hectares, but not more than 20 hectares.
The new law also provides for additional financial support for family farms by establishing a preferential payment procedure for a single payment for compulsory state social insurance for all members of the farming industry over a period of 10 years through a mechanism of surcharge for the benefit of the insured person/member of the family farm.
Henceforth, a farm with the status of a legal entity operates on the basis of the charter, and the farm without the status of a legal entity is based on a contract (declaration) on the establishment of a farm.
The contract for the establishment of a family farm is concluded by an individual with his family members in writing and is subject to notarization at the location of the property and land plots of the farm. The declaration on the establishment of a family farm (in the case of sole management of such an economy) is compiled by a natural person in writing.
In general, the draft law amends the Tax Code of Ukraine, the laws of Ukraine "On the farm", "On the state registration of legal entities, individuals-entrepreneurs and public groups", "On State Support for Agriculture in Ukraine" and "On the collection and accounting of a single contribution on compulsory state social insurance ".