Local authorities were given the right to establish specific rates of property tax and land tax.
The Tax Law abolished the provisions that established the minimum and maximum rates of real estate tax and land tax, within which local authorities could establish rates of local fees. It refers to residential real estate and agricultural land with buildings located on them, the tax rates for which have so far been limited: 0.05-0.4% and, accordingly, 0.1-0.3% of the taxable base. Thus, local authorities got the opportunity to independently set the rates of these taxes. At the same time, the Tax Code stipulates that when setting a specific tax rate for real estate and land tax, local authorities must be guided by the principle of predictability - in order to plan expenses, taxpayers must know in advance and in the established order to receive advice on the amount of taxes, as well as the principle of transparency in decision-making - they should, as a matter of priority, inform and provide free access to projects related to the amount of tax envisaged. In addition, local authorities, when setting a specific tax rate, must also ensure that there is proportionality between the interests of the local community and the interests of taxpayers, including not allowing unnecessary actions to be taken under the pretense of achieving society/community goals. In case of disagreement when setting specific tax rates, local public administrations are obliged to analyze the consequences of regulation. The State Chancellery, through its territorial bureaus, will control the legality of the decisions of the competent local public administration bodies to establish a specific tax rate. These changes to the Tax Code came into force on January 1, 2023. // 09.01.2023 — InfoMarket.
