TAXATION OF THE FARM

 According to the Law of Ukraine “On Farms” - farms are a form of entrepreneurial activity, and therefore they must also be taxed in accordance with the law.

 But what form of taxation to choose, citizens who plan to create a farm ask themselves? So, more about the forms of taxation of farms.

 Farms, like all other agricultural producers, can operate on a common taxation system. That is, they can pay income tax or a single tax. This applies to those farms that are formed with the status of a legal entity.

 As for farms that are registered as natural persons-entrepreneurs, they can be either on the general taxation system or on the simplified one.

General system of taxation

 Many believe that the overall tax system is more complex. But for farms that are farmers it is the most objective.

 There are no peculiarities of taxation of farms that are in this system of taxation, because they are subject to the same rules for legal entities. The procedure for paying the tax is defined in Art. 134 of the Tax Code of Ukraine. The income tax rate is 18%.

 If the income of the farm exceeds UAH 20 million, the income tax return is submitted quarterly, if less - once a year.

 General system of taxation for farms registered as sole proprietors

 The farm is registered as a sole proprietor and is in the general system of taxation and pays tax only on net income. That is, the difference between documented income and expenses.

 The tax rate is the same - 18%. But in addition, you need to pay SDRs "for yourself" and a military fee of 1.5%.

 Simplified tax system

 The simplified system of taxation with payment of the Single Tax of the 4th group can be chosen only by those farms that are agricultural producers.

 The object of taxation in this case will be the total amount of own and leased agricultural land. The tax rate is determined by the regulatory and monetary valuation of these lands.

 Farms can be payers of the Single Tax of the third group only if their annual income is less than 5 million hryvnias.

 The tax rate for VAT payers is 3%, for non-VAT payers - 5%. SSC is also paid "for itself".

 With regard to the Single Tax of the 2nd group, the rate of 20% of the minimum wage, which is set for January 1 of the respective year, is applied to this group of taxation. In such farms, the annual income should not exceed UAH 1.5 million.

 Such a farm may use the labor of employees, but not more than 10 people.

 Therefore, choosing a tax system for a farm, you must first focus on income that will be in the future, because it depends on which is the best tax system to choose for a particular farm.