Local Councils Can Now Provide Churches with Tax Exemptions for Residential Real Estate

The recent changes to the Tax Code of Ukraine will provide religious organizations with exemptions from paying tax on residential property used for their activities.

However, the parliament passed it to the discretion of local authorities, representatives of which often act according to their own religious preferences, reports the Institute for Religious Freedom.

Paragraph 265.4.2 states: “City, town, and village councils may establish additional exemptions from the tax which is paid on the territory of the residential property owned by religious organizations in Ukraine, statutes (regulations) are registered in accordance with the law, and are used to support the activities provided by such statutes (regulations).”

Local governments are required by February 1 of each year to submit to the relevant supervisory authority at the location of the residential real estate information regarding exemptions.

These changes were made in accordance with Law Number 403-VII from 04.07.2013.

The original version of Bill Number 2405 did not provide any exemptions to religious organizations. However, during his preparation for the second reading, MP Andriy Derkach (Party of Regions) made the amendments.

Recall that the All-Ukrainian Council of Churches and Religious Organizations appealed to the MPs with a request to completely remove religious organizations from the list of entities that pay tax on residential property. The representatives of the religions explained the need for this by noting that many houses of worship, seminar rooms, and monasteries have residential statuses.

Bill Number 2895 was introduced to Parliament in April 2013.