Some problems of property tax administration in the context of digitalization of tax administration (on the example of payment for land)
Authors: Babarytskyi Oleksandr 
Published: January 2025

Problem setting. Digitalization is currently being actively implemented in the field of tax and fee administration. Its consequence should be a significant transformation of the procedure for calculating taxes and fees, ensuring an increase in the efficiency and convenience of taxation, introducing the automation of data collection processes about taxable objects and their owners, and simplifying the calculation of tax liabilities. However, in the course of the introduction of electronic services, certain problems arise that need to be solved. The latter include those related to the payment of property tax (Article 265 of the Tax Code of Ukraine: it consists of a tax on immovable property other than a land plot, transport tax and land fee). First of all, we would like to point out the lack of proper integration between the State Register of Real Property Rights, the State Land Cadastre and other databases, which complicates the automatic administration of property tax. These registries are often out of sync or contain errors and outdated information. The analysis of tax practice confirms that in the case of late updating of data in the registers, tax authorities quite often send messages to non-existent owners, which is contrary to the provisions of p. 266.7 of Art. 266 Tax Code of Ukraine.

Purpose of research is to analyze the problems of property tax collection in the context of the digitalization of tax administration and propose ways to solve them using the example of land fees.

Аnalysis of recent researches and publications. Many researchers were concerned with the problems of paying taxes on property, for example, I.E. Krynytskyi, O.O. Koval, V.I. Prots, V. Demyanishyn and others. As for digitalization of tax administration, it is worth mentioning the works of O.O. Dmytryk, Yu. AT. Kostenko, A.S. Kolisnyk, A.M. Kotenka, N.A. Maryniv, A. AND. Podolska, V.O. Ryadinska, K.O. Tokareva, O.M. Chudak et al. However, in view of the permanent development of the field of property tax administration in the context of the introduction of digital services, relevant issues that require an urgent solution are on the agenda.

Аrticle’s main body.Currently, there is a rather controversial practice in Ukraine with the calculation of land tax. According to Art. 286.1 of the PKU, the integration of electronic systems, which is possible due to the digitalization of tax administration, on the one hand, allows tax authorities to automatically receive data, for example, from the State Land Cadastre. This means that thanks to digital platforms, the administration of the land tax becomes faster, because we have: (1) the ability to automatically form tax messages-decisions, (2) quite prompt exchange of information between registers, (3) convenient access of taxpayers to their data through electronic offices. However, in practice, we have numerous discrepancies between the information obtained from the State Land Cadastre, the State Register of Real Property Rights and the data displayed in the Tax Block ITS. In addition, there is a lack or unreliability of information in the State Register of Real Property Rights and the State Land Cadastre; lack of proper processing of information by controlling bodies; lack of integration of information contained in state registers, and on which conclusions of payers and control bodies are based on the presence or absence of an object of land tax taxation. The above and other factors result in the erroneous assessment of property tax liabilities and the emergence of numerous tax cases.

Сonclusions and prospects for the development. Based on the analysis of numerous court decisions, the urgent need to amend the legislation regarding various aspects affecting the definition of property tax elements has been substantiated. The optimal steps in the context of the digitalization of tax administration will be the creation and implementation of certain digital algorithms in the work of control bodies and state authorities concerning: (1) regular and mandatory updating of information in registers in accordance with changes in ownership, (2) provision of automatic exchange data between registers, integration of data from numerous registers, (3) automated verification of information that is the basis for determining tax liabilities of taxpayers.