Are real estate agents required to notify the tax authorities about lease agreements?

Real estate agents dealing with rentals have long been more than simple intermediaries: they now have specific obligations on tax reporting and financial monitoring, and the updated clarifications of the STS and the Ministry of Finance confirm that they must report certain lease agreements — though not in all cases and only under a special procedure.

When a realtor must report a lease agreement
The basic rule is set out in subpara. 170.1.6 of the Tax Code of Ukraine. It states that:
business entities (sole proprietors or legal entities) engaged in intermediary activities related to the provision of real estate rental services (realtors)
are obliged to submit to the tax authority at their place of registration information on civil‑law lease agreements concluded through their intermediation,
if one of the parties to the agreement is an individual landlord.

So the key conditions under which the obligation arises are:

1. You act strictly as an intermediary, not as the owner of the property. If a sole proprietor rents out their own apartment without an intermediary, subpara. 170.1.6 does not apply.
2. It is a lease agreement for real estate (residential or non‑residential), not a one‑off service or consultation.
3. The landlord is an individual (not a sole proprietor and not a legal entity).

If at least one of these conditions is not met (for example, the landlord is a company and the realtor works only with the tenant‑buyer without direct intermediation for the owner), formally there is no obligation to submit information under this rule.

What information must be submitted and in what form
A separate form is provided for reporting lease agreements: “Information of business entities engaged in intermediary activities related to the provision of real estate rental services”. It was approved by Order No. 497 of the Ministry of Finance dated 13.05.2017.

Key points:
The information is submitted to the tax authority at the realtor’s place of registration (sole proprietor or company).
It is filed within the deadlines for the tax payroll report (Form 4DF), that is, together with the quarterly reporting.
The form includes the main data: parties to the agreement, leased property, date of conclusion, term, rent amount, etc.

Note that the STS emphasises in its clarifications that the obligation applies regardless of how many agreements were concluded in a given period — even one must be reported.

Liability for failure to submit information
Article 119¹ of the Tax Code sets out specific fines for violating the procedure or deadlines for submitting such information:
680 UAH for each first violation;
1,360 UAH for each repeated violation within a year.

“Each violation” means each agreement that should have been reported but was not, or was reported late or incorrectly. For agencies that conclude hundreds of leases per year, this can translate into substantial amounts.

In addition to fines, failure to submit information may trigger increased attention to the realtor’s own activity: inspections, information requests, and scrutiny of commission income.

How this relates to financial monitoring
Alongside tax requirements, realtors also fall under financial monitoring rules as specially designated primary reporting entities for real‑estate transactions.

Key elements:
Realtors must identify their clients and conduct proper KYC checks, especially if the monthly rent exceeds 400,000 UAH or if the deal raises suspicions.
In such cases they report suspicious transactions to the State Financial Monitoring Service via a special portal, separately from reporting to the STS.
The Ministry of Finance stresses that realtors are not required to report all deals above 400,000 UAH, only suspicious ones or those that meet financial‑monitoring criteria. Therefore, tax reporting (Form No. 497 to the STS) and financial‑monitoring reports (to the FIU) should not be mixed up.

Practical takeaways for realtors

1. Clearly fix your role in every deal: if you mediate between an individual landlord and a tenant, the duty to notify the STS arises automatically.
2. Maintain an internal register of lease agreements with the core data needed for the form so you do not miss any transaction.
3. Use the official form and file it together with your tax payroll report within the statutory deadlines.
4. Review past agreements and, if necessary, consult a lawyer on whether to file late forms and explanations to minimise fines.
5. For high‑value or atypical leases (from 400,000 UAH per month), comply with financial‑monitoring rules and your internal procedures for detecting suspicious transactions.

For real‑estate agencies this means that the classic function of simply “bringing landlord and tenant together” has long been supplemented by regulatory duties — tax and compliance. Ignoring them may cost more than setting up a basic system of record‑keeping and reporting.

If you have any questions or issues related to fulfilling realtor obligations to the STS, completing the form approved by Ministry of Finance Order No. 497, assessing fine risks or complying with financial‑monitoring requirements, you should consult lawyers specialising in tax law and real‑estate transactions.
Author: Ihor Yasko, Managing Partner at WINNER Law Firm, PhD in Law.