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The transfer of the right to use land to another person is exempt from VAT
The transfer of the right to use land to another person is exempt from VAT
One of the key changes made to the Tax Code, aimed at reducing the tax burden on businesses and promoting entrepreneurial activities, is related to the exemption of the operation of transferring the right to use land to another person and rental payments for land from Value Added Tax (VAT).
As is known, according to the provisions of the Tax Code, land is neither considered a good for VAT purposes, nor is the transfer of ownership rights over land to another person considered a service (work).
Income derived from renting land and transferring the right to use land to another person by individuals is considered non-business income, and therefore, these operations are not subject to VAT. However, transactions involving the transfer of the right to use land and land rental by legal entities were subject to VAT, as there was no direct restriction in the legislation. This created a discrepancy with the VAT taxation object.
Therefore, to align the legal norms concerning the VAT taxation object, amendments have been made to the Tax Code, exempting operations involving the transfer of the right to use land and land rentals by legal entities from VAT.
One of the key changes made to the Tax Code, aimed at reducing the tax burden on businesses and promoting entrepreneurial activities, is related to the exemption of the operation of transferring the right to use land to another person and rental payments for land from Value Added Tax (VAT).
As is known, according to the provisions of the Tax Code, land is neither considered a good for VAT purposes, nor is the transfer of ownership rights over land to another person considered a service (work).
Income derived from renting land and transferring the right to use land to another person by individuals is considered non-business income, and therefore, these operations are not subject to VAT. However, transactions involving the transfer of the right to use land and land rental by legal entities were subject to VAT, as there was no direct restriction in the legislation. This created a discrepancy with the VAT taxation object.
Therefore, to align the legal norms concerning the VAT taxation object, amendments have been made to the Tax Code, exempting operations involving the transfer of the right to use land and land rentals by legal entities from VAT.