City council provides tax exemption for all churches, except UOC (MP)

Despite the statements by  mayor Vitaliy Klichko, Kyiv City Council’s decision on the tax rate for residential and non-residential property withdrew tax exemption from the Ukrainian Orthodox Church (Moscow Patriarchate).

According to the official website of the city council and LIGA website, the resonant Decision of 28.01.2015 N 58/923 was enacted on January 31, the Institute of Religious Freedom reports.

It is envisaged that the tax rate for residential and / or non-residential property owned by individuals and entities shall be set as a percentage of the minimum wage established by law as of January 1 of the reporting (tax) year, for 1 square meter of the tax assessment basis.

This tax rate for residential and non-residential property for all locations (zones) that belong to religious buildings and religious activities has been set at 0.01%, i.e. 0.1218 USD per 1 square meter a year.

This preferential rate does not apply to “buildings, structures and premises belonging to the parishes of the Ukrainian Orthodox Church.” For them, the tax rate is 12.18 USD per 1 square meter a year.

“There should be no preferences on the grounds of religion. The City Council’s decision to withdraw property tax exemption from one of the churches is contrary to the Constitution and needs to be revised,” said Kyiv mayor Vitaliy Klichko when the city council voted for this decision.

IRS Executive Director MaksymVasin commented on the innovation as follows: "The term parish generally refers to a religious community, as the term is not used in legal practice. Therefore it is likely that the properties that are owned by the Kyiv Metropolis or other legal entitieswithin the UOC (MP) with the exception of religious communities will also benefit from a reduced tax rate implemented by the city council.”

Previously, experts noted that the mayor has no authority to overrule the City Council as a representative body. However, according to the regulations of city council, he has only 5 days to suspend the city council’s decision and submit it for further consideration by the City Council.

So, mayor Klichko is unlikely to exercise the right to suspend the cited decision, and will probably seek its review andamendment by the city council.