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What tax exemptions and incentives are available for the production of agricultural products?
What tax exemptions and incentives are available for the production of agricultural products?
The Tax Code contains the concept of “production of agricultural products.” Which products are included in this category? The activity of our enterprise is the cultivation of tobacco products. Is this type of activity considered a taxable object for profit tax and value-added tax?
The State Tax Service under the Ministry of Economy reported that, according to Article 13.2.60 of the Tax Code, the production of agricultural products includes the breeding and feeding of animals and poultry, including by industrial methods (such as specialized broiler farms, automated barn systems, etc.), obtaining products from them while they are alive (in their initial form, without being converted into a new product through processing, without changing their chemical composition, and without preservation), as well as the cultivation of crop products.
With the exception of fish products subjected to processing operations, fish products that undergo slaughtering and freezing operations by persons engaged in fish farming activities are considered equivalent to agricultural products for the purposes of the Tax Code.
According to Article 13.2.61 of the Tax Code, the sale of agricultural products is considered the supply of agricultural products for the purposes of the Tax Code, provided that the following requirements are met:
Produced livestock (including those produced by industrial methods, in specialized broiler farms, automated barn systems, and other facilities) must be supplied alive, and products obtained from them while alive must be supplied in their original form without being exposed to any chemical treatment;
When supplying crop products and other agricultural products, they must retain their original natural form, their chemical composition must not be altered, and they must not be preserved.
The provisions of Article 13.2.61 of the Code also apply to fishing activities (except for the production of fish roe).
It was also reported that, pursuant to Article 106.1.14 of the Tax Code, the profits earned by legal entities engaged in the production of agricultural products (including by industrial methods) from this activity are exempt from profit tax for a period of 13 years starting from January 1, 2014. In addition, under Article 164.1.18 of the Tax Code, the turnover from the sale of agricultural products produced by agricultural producers themselves (including by industrial methods) is exempt from value-added tax for a period of 13 years starting from January 1, 2014.
The Tax Code contains the concept of “production of agricultural products.” Which products are included in this category? The activity of our enterprise is the cultivation of tobacco products. Is this type of activity considered a taxable object for profit tax and value-added tax?
The State Tax Service under the Ministry of Economy reported that, according to Article 13.2.60 of the Tax Code, the production of agricultural products includes the breeding and feeding of animals and poultry, including by industrial methods (such as specialized broiler farms, automated barn systems, etc.), obtaining products from them while they are alive (in their initial form, without being converted into a new product through processing, without changing their chemical composition, and without preservation), as well as the cultivation of crop products.
With the exception of fish products subjected to processing operations, fish products that undergo slaughtering and freezing operations by persons engaged in fish farming activities are considered equivalent to agricultural products for the purposes of the Tax Code.
According to Article 13.2.61 of the Tax Code, the sale of agricultural products is considered the supply of agricultural products for the purposes of the Tax Code, provided that the following requirements are met:
Produced livestock (including those produced by industrial methods, in specialized broiler farms, automated barn systems, and other facilities) must be supplied alive, and products obtained from them while alive must be supplied in their original form without being exposed to any chemical treatment;
When supplying crop products and other agricultural products, they must retain their original natural form, their chemical composition must not be altered, and they must not be preserved.
The provisions of Article 13.2.61 of the Code also apply to fishing activities (except for the production of fish roe).
It was also reported that, pursuant to Article 106.1.14 of the Tax Code, the profits earned by legal entities engaged in the production of agricultural products (including by industrial methods) from this activity are exempt from profit tax for a period of 13 years starting from January 1, 2014. In addition, under Article 164.1.18 of the Tax Code, the turnover from the sale of agricultural products produced by agricultural producers themselves (including by industrial methods) is exempt from value-added tax for a period of 13 years starting from January 1, 2014.