Transition to another single tax group from October 1, 2026: terms, conditions and actions of individual entrepreneurs

A Sole Proprietorship that already uses the single tax system under Group I, II or III and wants to change the group from October 1, 2026 must submit an application no later than September 15, 2026, inclusive. The transition is possible only if the entrepreneur meets all the requirements of the new group: income limit, number of employees, types of business activities, customer categories and other restrictions established by the Tax Code of Ukraine. The State Tax Service explicitly indicated September 15 as the final day for submitting such an application in the tax calendar for September 2026.

If a Sole Proprietorship does not want to change the group but instead wants to completely leave the simplified taxation system and switch to the general taxation system from October 1, 2026, a different deadline applies: the application must be submitted no later than 10 calendar days before the beginning of the new quarter. In 2026, the calculated date of September 20 falls on a Sunday, so the final submission date is Monday, September 21, 2026. This is the date specified by the State Tax Service in its September tax calendar.

Key deadlines for switching from October 1, 2026

For an existing single tax payer switching to another group, Subparagraph 298.1.5 of the Tax Code of Ukraine establishes the deadline — no later than 15 calendar days before the beginning of the next quarter. For switching from the general taxation system to the simplified taxation system, the same 15-day deadline is established by Subparagraph 298.1.4 of the Tax Code of Ukraine, but additional requirements apply in this case.

Who can switch to Group I, II or III

In 2026, the income limits are calculated based on the minimum wage of UAH 8,647 established as of January 1 of the year.

The Tax Code establishes the limits as 167 minimum wages for Group I, 834 — for Group II and 1,167 — for Group III. The State Tax Service calculated the corresponding maximum amounts for 2026.

An entrepreneur switching, for example, from Group III to Group II must assess not only expected income after October 1 but also compliance with the criteria of the selected group throughout the calendar year. If the actual indicators no longer allow the entrepreneur to meet the requirements of Group II, a voluntary transition to this group does not comply with Paragraph 291.4 and Subparagraph 298.1.5 of the Tax Code of Ukraine.

Taxes after switching to a new group

For Groups I and II, the single tax is set by local councils within the maximum permitted rates. In 2026, the maximum rate for Group I is UAH 332.80 per month, and for Group II — UAH 1,729.40 per month. The military levy for Sole Proprietorships in Groups I and II is UAH 864.70 per month.

For Group III, two main single tax rates apply:

• 5% of income — without separate VAT payment under this model;

• 3% of income + VAT — for registered VAT payers.

The military levy for Group III Sole Proprietorships is 1% of income received.

The minimum Unified Social Contribution in 2026 is UAH 1,902.34 per month for Sole Proprietorships that are required to pay the contribution for themselves. The existence of a legal basis for exemption from the Unified Social Contribution must be assessed separately; changing the single tax group itself does not cancel exemptions provided by law.

Special restrictions for Group II

For Group II, it is important to correctly apply restrictions regarding customers. The Tax Code establishes a requirement for providing services: services may be provided to single tax payers and/or individuals. At the same time, the provision concerning the production and sale of goods is formulated separately and does not contain the same restriction regarding the buyer's tax status.

In addition, Group II cannot be used by Sole Proprietorships that:

• provide certain intermediary services related to the purchase, sale, lease and valuation of real estate;

• provide Internet access services;

• manufacture, supply or sell jewelry and household items made of precious metals and gemstones.

Such entrepreneurs may operate under Group III if they meet its requirements.

Which activities are prohibited for Groups I–III

Before changing groups, it is necessary to check not only the KVED code in the Unified State Register but also the actual nature of the business activity. Paragraph 291.5 of the Tax Code of Ukraine establishes activities for which the simplified taxation system under Groups I–III is unavailable.

These include, in particular:

• organization and conduct of gambling, issuance and conduct of lotteries;

• foreign currency exchange;

• production, export, import and sale of excisable goods, except for exemptions expressly provided by the Tax Code of Ukraine;

• certain transactions involving precious metals and gemstones;

• extraction and sale of minerals, except in cases provided by law;

• certain types of financial intermediation;

• management of enterprises;

• certain postal and electronic communication services;

• sale of works of art and antiques and organization of relevant auctions;

• organization and conduct of touring events;

• security activities.

Security activities became separately prohibited under the simplified taxation system from January 1, 2026. The State Tax Service confirms that a Sole Proprietorship engaged in such activities cannot be a Group II or Group III taxpayer.

Separate restrictions also apply to Sole Proprietorships that rent out property. The simplified taxation system under Groups I–III cannot be used by individual entrepreneurs who rent out land plots with a total area exceeding 0.2 ha, residential premises or parts thereof exceeding 400 sq. m, or non-residential premises exceeding 900 sq. m.

Having a license or another permit does not cancel tax restrictions. If a particular activity requires licensing, the entrepreneur must separately comply with the licensing requirements, but the license itself does not provide the right to use the single tax system if Paragraph 291.5 of the Tax Code of Ukraine expressly prohibits such activity under the simplified taxation system.

What to check before switching

Before submitting the application, the entrepreneur should check:

1. Income since the beginning of 2026. It must comply with the limit of the group to which the entrepreneur plans to switch.

2. Number of hired employees. Group I does not allow employees, while Group II allows no more than 10 employees at the same time.

3. Actual types of business activities. They must be permitted for the selected group.

4. KVED codes in the single tax payer register. Receiving income from activities that are not registered for the taxpayer may result in an obligation to leave the simplified taxation system.

5. Counterparties. This is particularly important for Group II Sole Proprietorships that provide services.

6. Tax debt. Tax debt is a separate factor that may affect eligibility for the simplified taxation system and, under the conditions specified by the Tax Code of Ukraine, may result in a mandatory withdrawal from it.

7. VAT payer status. Switching from Group III at 3% + VAT to Group I, II or Group III at the 5% rate results in cancellation of VAT registration in accordance with the procedure established by the Tax Code.

8. ECR or PECR. This is particularly important if the entrepreneur switches from Group I to Group II or III.

Which application must be submitted

To switch groups, the Application for Use of the Simplified Taxation System is used, the form of which was approved by Order No. 308 of the Ministry of Finance of Ukraine dated 16.07.2019.

The application specifies, in particular:

• details of the Sole Proprietorship or legal entity;

• tax address;

• place of business activity;

• KVED codes;

• the selected group and rate or information about their change;

• number of employees;

• date or period of transition.

The application also provides information on changing the single tax payer group and rate.

If an existing single tax payer simply switches from one Group I–III to another, Subparagraph 298.1.5 of the Tax Code of Ukraine applies. This provision does not require a separate calculation of income for the previous year for a standard group change.

A different situation applies when an entrepreneur is on the general taxation system and wants to switch to the single tax system from October 1. In this case, a calculation of income for the previous calendar year must be attached to the application. Such a transition may be made only once during a calendar year and provided that the criteria established by the Tax Code of Ukraine for the previous calendar year are met.

How to submit the application

The Tax Code provides several methods:

• in person by the taxpayer or their authorized representative;

• by mail with delivery confirmation and an inventory of the enclosure;

• electronically in compliance with legislation on electronic documents, electronic identification and trust services, including through the Electronic Cabinet.

For postal submission, the application submission date is considered to be the date on which the correspondence is handed over to the postal operator, as confirmed by the postal stamp.

After the application has been processed, it is advisable to check the current data in the single tax payer register and, if necessary, obtain an extract from the register.

Switching to Group III at the 3% rate and VAT

If an entrepreneur switches, for example, from Group II to Group III and simultaneously plans to apply the 3% + VAT rate, simply specifying Group III is not sufficient: the VAT registration rules must also be fulfilled.

The Tax Code of Ukraine allows a non-VAT payer to choose Group III at the 3% rate when changing groups, provided that the taxpayer registers for VAT and submits the application for changing the group no later than 15 calendar days before the beginning of the new quarter.

For an existing Group III taxpayer that does not change the group but switches from the 5% rate to 3% + VAT, the Tax Code provides a separate procedure: the application to change the single tax rate must be submitted no later than 10 calendar days before the beginning of the quarter, and VAT registration must be completed according to the rules of Section V of the Tax Code of Ukraine.

If a Group III taxpayer applying the 3% + VAT rate switches to Group I or II or to the Group III rate that includes VAT within the single tax, their VAT registration is cancelled according to the rules of the Tax Code of Ukraine.

ECR and PECR after changing the group

Changing to another group does not automatically mean that all ECR obligations appear or disappear. The group, type of transaction, payment method and special exemptions under Law No. 265/95-VR must be assessed.

For Group I, Paragraph 296.10 of the Tax Code of Ukraine contains a direct rule: Group I taxpayers do not use ECR or PECR.

Therefore, particular attention is required from a Sole Proprietorship that switches from Group I to Group II or III from October 1. The direct exemption under Paragraph 296.10 no longer applies, and if the entrepreneur carries out payment transactions, the use of ECR/PECR is determined by Law No. 265/95-VR and the exemptions provided by it. Law No. 265 is valid as amended on June 26, 2026.

Changing the group does not exempt the entrepreneur from liability for violations of payment transaction rules. Financial penalties for ECR-related violations are established by Article 17 of Law No. 265/95-VR. Therefore, the cash register and PECR settings should be completed before the first payment transaction carried out after switching to the new group.

Accounting and reporting after changing the group

As a general rule, Sole Proprietorships in Groups I and II submit the single tax payer declaration within the deadline established for the annual reporting period. Group III reports quarterly.

However, there is a special rule for transitions during the year. If a Group I or II taxpayer voluntarily switches to Group II or III or leaves the simplified taxation system, the taxpayer submits the declaration within the deadlines established for the quarterly reporting period. In cases provided by the Tax Code of Ukraine, such a quarterly declaration exempts the taxpayer from submitting an annual declaration under the previous rules.

Sole Proprietorships in Groups I, II and III that are not VAT payers keep income records in any form by recording income received on a monthly basis. For Group III Sole Proprietorships that are VAT payers, the rules for recording income and expenses using the standard form apply.

Switching from the single tax system to the general taxation system from October 1

For voluntary withdrawal from the simplified taxation system, the application must be submitted no later than 10 calendar days before the beginning of the new quarter. The transition takes effect from the first day of the month following the quarter in which the application was submitted. Therefore, to switch from October 1, 2026, the application must be submitted in the third quarter.

In the 2026 calendar, the 10-day deadline falls on September 20, but this is a Sunday. Under Part Five of Article 254 of the Civil Code, if the final day of a deadline falls on a weekend or non-working day, the deadline expires on the next working day. Therefore, the official calendar of the State Tax Service establishes September 21, 2026 as the final day for submitting an application to leave the simplified taxation system.

After switching, a Sole Proprietorship pays tax on business income according to the rules of the general taxation system, established, in particular, by Article 177 of the Tax Code of Ukraine, and separately complies with the requirements regarding the military levy, Unified Social Contribution and VAT if they apply to its activities.

Quarter IV and Group IV of the single tax are different concepts

The September 15 deadline applies to switching between Groups I, II and III from the beginning of the fourth calendar quarter. It should not be interpreted as a general deadline for switching to Group IV of the single tax.

Group IV, which is intended for agricultural producers and certain farming enterprises specified by law, is subject to a separate procedure. Agricultural producers must submit the relevant documents for switching or annual confirmation of their status no later than February 20 of the current year.

What happens if you miss September 15

If a taxpayer who is entitled to remain in the current group simply fails to submit a voluntary application by September 15, the new group will not apply from October 1. The Tax Code does not establish a separate fixed penalty merely for missing the voluntary transition deadline: the entrepreneur continues operating under the current group if they still meet its requirements.

A different situation applies when the transition is required not voluntarily but because the conditions of the simplified taxation system have been violated. In this case, the mandatory rules of Subparagraph 298.2.3 of the Tax Code of Ukraine apply. Grounds for mandatory transition include, in particular:

• exceeding the income limit;

• using a prohibited method of payment;

• carrying out activities prohibited under the single tax system;

• exceeding the permitted number of employees;

• carrying out activities that are not included in the single tax payer register;

• for Groups I and II — carrying out activities that do not meet the conditions of the relevant group;

• long-term tax debt in cases provided by the Tax Code of Ukraine.

For Sole Proprietorships in Groups I–III, certain violations are subject to the single tax at a rate of 15%, including amounts exceeding the income limit and income from certain transactions that violate the conditions of the simplified taxation system.

If the tax authority establishes during an audit that the requirements for a Group I–III taxpayer have been violated, registration may be cancelled by decision of the State Tax Service from the first day of the month following the quarter in which the violation occurred. After such cancellation based on an audit, the simplified taxation system may be chosen again after four consecutive quarters have passed from the date of the tax authority's decision.

How to configure VAT, fiscal receipts and PECR in Torgsoft after changing the single tax group

Torgsoft does not replace the application to the State Tax Service and does not legally transfer an entrepreneur to another taxation system. The software can support the operational part of the transition: after the new tax status has been determined, VAT processing can be configured in the accounting settings, and Torgsoft documentation provides for changing the relevant VAT settings, working with tax invoices and accounting for VAT transactions.

If the business must use fiscalization after the transition, Torgsoft supports fiscal receipts and PECR. In the receipt settings, you can select non-fiscal, fiscal or mixed printing mode; for goods that must be processed through a fiscal registrar, the corresponding fiscal attribute is used in the software. Torgsoft also supports processing fiscal receipts when selling and returning goods.

For PECR, Torgsoft provides settings for taxes and payment methods, and after a configured PECR is linked, the current workstation can use it to fiscalize payment transactions. Therefore, when switching, for example, from Group I to Group II or III, it is advisable to check by October 1 not only the application submitted to the State Tax Service, but also the product settings, VAT rates where applicable, payment methods, receipts and PECR directly in the accounting system.

Final checklist for switching from October 1, 2026

1. Determine the required group and rate.

2. Calculate income since the beginning of the year and compare it with the limit for the new group.

3. Check employees, counterparties and actual types of business activities.

4. Make sure the activity is not included among the prohibitions in Paragraph 291.5 of the Tax Code of Ukraine.

5. Check KVED codes and the data in the single tax payer register.

6. If Group III at 3% is selected — separately complete the VAT registration procedure.

7. To change between Groups I–III, submit the application by September 15, 2026, inclusive.

8. To leave the single tax system and switch to the general taxation system, submit the application by September 21, 2026, inclusive.

9. Check the registration data after the application has been processed.

10. By October 1, adjust accounting, tax settings and ECR/PECR if the change of group affects their use.

Official sources

• Tax Code of Ukraine dated 02.12.2010 No. 2755-VI — Articles 291, 293, 295, 296, 298, 299: requirements for groups, rates, reporting, switching between groups, leaving the simplified taxation system and grounds for cancellation of registration. Tax Code of Ukraine — zakon.rada.gov.ua

• Law of Ukraine «On the State Budget of Ukraine for 2026» No. 4695-IX — Articles 7–8: subsistence minimum and minimum wage indicators that determine income limits and maximum single tax rates. Law No. 4695-IX — zakon.rada.gov.ua

• Order of the Ministry of Finance of Ukraine dated 16.07.2019 No. 308 — application form for use of the simplified taxation system, income calculation, request and extract from the single tax payer register. Order of the Ministry of Finance No. 308 — zakon.rada.gov.ua

• Civil Code of Ukraine dated 16.01.2003 No. 435-IV, Article 254 — the rule for extending the final day of a deadline when it falls on a weekend or non-working day. Civil Code of Ukraine — zakon.rada.gov.ua

• Law of Ukraine dated 06.07.1995 No. 265/95-VR «On the Use of Registrars of Settlement Operations in Trade, Catering and Services» — rules for the use of ECR/PECR and liability. Law No. 265/95-VR — zakon.rada.gov.ua

• State Tax Service of Ukraine: Tax Calendar for September 2026 — September 15 as the final day for changing the single tax group and September 21 as the final day for submitting an application to leave the simplified taxation system. State Tax Service Tax Calendar for September 2026

• State Tax Service of Ukraine: single tax rates, Unified Social Contribution and military levy for 2026 — calculated income limits and payment amounts for Groups I–III. Tax amounts and limits for 2026 — State Tax Service