UKRAINE Law and Practice Contributed by: Timur Bondaryev, Maryna Sharapa, Andrii Pidhainyi and Olena Yurets, Arzinger
involving parties included in the Ukrainian sanc - tions list. 2.7 Soil Pollution or Environmental Contamination Ukrainian law does not impose responsibility on a buyer if the buyer did not commit any violations in relation to soil pollution or environmental con - tamination. However, the controlling authorities usually record the fact that the soil is polluted (or that another such violation has been commit - ted) and issue a fine to the owner of the relevant property. It is then the buyer’s responsibility to challenge the fine in court or by administrative procedure. However, it can be difficult to prove that the vio - lation was committed by the seller, as the burden of proof is on the buyer. To this end, a compre - hensive review of the purchased property is rec - ommended, including conducting technical or ecological DD if necessary, and making a record of its condition in the agreement or transfer act. 2.8 Permitted Uses of Real Estate Under Zoning or Planning Law In order to ascertain the applicable zoning reg - ulations, the buyer may request the relevant information from the seller and the authorities. The zoning regulations are most commonly con - tained in the master plan of the city/village, the zoning plan and/or the detailed plan of the terri - tory. There is no option to enter into a develop - ment agreement with public authorities to facili - tate a private project. 2.9 Condemnation, Expropriation or Compulsory Purchase There are several grounds for governmental tak - ing of land or real estate, as set out below.
• When a person acquires land that they are not entitled to own (eg, if a foreigner acquires agricultural land) and does not dispose of it within one year. • Where a compulsory purchase of land or real estate for public needs is possible (eg, the construction of roads of State significance, and of airports). In both cases, this is done through a court and compensation should be paid. • The expropriation of land or real estate in connection with the introduction and imple - mentation of martial law measures is also possible. In this case, expropriation is carried out by decision of the military command. • Lastly, in 2022, in connection with the full- scale invasion of Ukraine by Russia, the insti - tution of seizure of property into State owner - ship was introduced as a type of sanction. 2.10 Taxes Applicable to a Transaction An asset deal is subject to 20% VAT. The sale of an undeveloped plot of land is VAT-exempt. If the buyer is an individual, a pension duty of 1% of the property value applies. Stamp duty is 1%. For land and real estate, notarisation costs will apply, in particular for certifying the contract. There is also an administrative fee for registra - tion of title to the purchased asset. In certain cases, it is necessary to pay a military levy at the rate of 1.5%. A share deal (acquisition of shares of a property- holding company) is VAT-exempt, and no further transaction taxes and notary fees apply. Howev - er, withholding tax may be payable by the seller (see 8.4 Income Tax Withholding for Foreign Investors for more detail). The distribution of transaction costs between parties may vary. However, it is common for
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