How to close a sole proprietorship

How to close a FOP: complete procedure, taxes, reporting, RRO, licenses, and audits

Closing a Sole Proprietorship (FOP) begins not with the tax office, but with the state registration of termination of entrepreneurial activity. As long as there is no record of termination in the EDR, the FOP legally exists. From the date such a record is entered, the individual loses the status of an entrepreneur, but is not automatically exempt from already accrued taxes, ESV, reporting, RRO/PRRO, bank accounts, licenses, labor, and contractual obligations. (Legislation of Ukraine)

After the record in the EDR, you need to close all "loose ends": submit the final declarations, pay taxes and ESV, deregister or check the status of RRO/PRRO, submit form 20-OPP regarding closed objects, and deal with VAT, licenses, employees, goods, premises, and documents. For a FOP on the general system, the final declaration is submitted within 20 calendar days after the month of closure; for single tax payers, the deadlines depend on the group: groups 1-2 report within annual deadlines, group 3 - within quarterly deadlines. ESV for the month of closure must also be settled. (ck.tax.gov.ua)

When is a FOP considered closed

A FOP is considered terminated exactly from the date the record of state registration of termination of entrepreneurial activity is entered into the Unified State Register. This is the key date for all further actions: reporting, taxes, ESV, VAT, RRO/PRRO, and audits. (Legislation of Ukraine)

Step 1. Submit a termination application

You can submit documents for closure:

For this registration action, Form 12 is used — an application for state registration of termination of entrepreneurial activity of an individual entrepreneur by their decision. If submitted via Diia, the application is generated in the electronic service and signed with a KEP or Diia.Signature. (Legislation of Ukraine)

State registration of such an action is carried out within 24 hours after the receipt of documents, excluding weekends and holidays. After this, the registrar transfers the data to the tax office. (Diia)

If the FOP was registered before July 1, 2004

If you registered as an entrepreneur before 01.07.2004 and there is no information about you in the EDR, you first need to enter this information into the register, and only then terminate the FOP. (Diia Guide)

Step 2. Immediately after the record in the EDR

After the termination record is entered, check your status in the EDR and do not delay the tax part. Diia directly reminds you: after closing a FOP, you must submit reports, pay taxes, close the entrepreneur's bank account, and, if necessary, cancel licenses. (Diia)

Separately consider another practical matter: after the information about the termination of the FOP appears in the state register, electronic document exchange with the tax office stops. Because of this, it is better not to delay the final reporting, and if electronic submission is no longer available, submit it in person, through an authorized representative, or by mail with a description of the enclosure and delivery notification. (dp.tax.gov.ua)

Taxes and reporting after closure

FOP on the general system

After closure, a FOP on the general system submits a tax declaration on property status and income for the last period within 20 calendar days following the last calendar day of the month in which the state registration of termination was carried out. The last period is from the day following the end of the previous reporting period to the last day of the month in which the FOP was closed. Only income from entrepreneurial activity is reflected in this declaration. (ck.tax.gov.ua)

The amounts of personal income tax (PIT) and military tax determined in such a declaration are paid within 10 calendar days after the last day of the deadline for submitting the declaration. General rates apply for entrepreneurial income on the general system: PIT - 18%, military tax - 5%. If the deadline falls on a weekend or holiday, the term is moved to the next operational day. (ck.tax.gov.ua)

FOP on the single tax

For single tax payers, the last tax period is the period in which the tax office received a notification from the state registrar about the termination of the FOP. But the deadlines for submitting the final declaration remain the same as for the corresponding group. (od.tax.gov.ua)

For groups 1 and 2, the declaration is submitted within the deadlines set for the annual reporting period, that is, within 60 calendar days after the end of the year. For group 3 — within the deadlines of the quarterly period, that is, within 40 calendar days after the end of the quarter in which the FOP was closed. (Legislation of Ukraine)

For single tax payers, it is important not to miss the final assessment of the single tax itself: in case of termination of activity, tax liabilities for the payment of the single tax are accrued until the last day of the calendar month in which the registration of the single tax payer was canceled based on a notification from the state registrar. (tax.gov.ua)

In 2026, the military tax also applies to single tax payers: for groups 1, 2, and 4 — 10% of the minimum wage as of January 1 of the year, for group 3 — 1% of income. This must be taken into account in the final calculation upon closure. (tax.gov.ua)

ESV after closure

Closing a FOP does not cancel the obligation to settle the ESV. Regardless of the taxation system, the ESV must be paid for the month in which the FOP was closed. (Diia)

For a FOP on the general system, ESV information is submitted as part of the declaration on property status and income through Annex ESV 1. The submission deadline is the same as for the final declaration: 20 calendar days after the month of closure. Payment of ESV is within 10 calendar days after the last day of the deadline for submitting such reporting. The separate "old" liquidation report on ESV in form D5 is not the base form for such a case now. (Zir Tax)

For single tax payers, the final reporting is submitted as part of the single tax payer declaration with Annex 1, which replaced the separate ESV report. At the same time, categories of FOPs of groups 1-3 exempt from paying ESV for themselves may not submit Annex 1 if the conditions for exemption provided by Law No. 2464 are met. (dn.tax.gov.ua)

If you were a VAT payer

In case of termination of a FOP's activity, the cancellation of VAT payer registration can occur automatically. If you submit the application yourself, form 3-PDV is used, and the controlling body within 10 calendar days either cancels the registration if there are grounds or provides a reasoned refusal. (tax.gov.ua)

Before final VAT closure, check the balances of goods, services, and non-current assets for which a tax credit was formed. If they were not used in taxable operations within business activities, tax liabilities must be accrued in the last reporting period no later than the date of registration cancellation according to the rule of paragraph 184.7 of the Tax Code. (dp.tax.gov.ua)

From the date of VAT registration cancellation, you no longer have the right to form a tax credit and issue tax invoices. (ck.tax.gov.ua)

RRO, PRRO, and form No. 20-OPP

If during your activity you used a store, warehouse, office, pickup point, kiosk, workshop, cafe, mobile point of sale, or other object through which the business operated, its closure must be reflected in form No. 20-OPP. You need to submit such an application within 10 working days after the object's closure; code 6 is used in column 2 for closure. (rv.tax.gov.ua)

If an RRO or PRRO was registered for the closed object, the issue of cash register registration must be brought to an end. For PRRO, the tax office directly indicates that after submitting 20-OPP regarding the closure of the object, the system automatically cancels the PRRO registration via the fiscal server. For a classic RRO, the tax authority has the right to cancel the registration if a 20-OPP is received in which the business unit is designated as closed or not in use. (dp.tax.gov.ua)

However, in practice, you should not rely only on "automation". After submitting 20-OPP, check in the Electronic Cabinet whether the object is correctly closed and whether the PRRO/RRO is indeed canceled. If there are discrepancies, submit a revised 20-OPP or an application for cancellation/re-registration. (tax.gov.ua)

Before canceling the PRRO, you must ensure the transfer to the fiscal server of all copies of settlement documents created offline, all fiscal reporting checks, and prescribed notifications. Otherwise, you can get into trouble even after the business has actually stopped. (sumy.tax.gov.ua)

If you are still accepting payment for goods or services until complete closure, the RRO/PRRO rules apply in the usual manner. Starting from August 1, 2025, full financial sanctions for violations of the use of RRO/PRRO apply again to all business entities: 100% of the sale value for the first violation and 150% for each subsequent one. (lg.tax.gov.ua)

Licenses, permits, excise issues

If the FOP had licenses, they cannot be "left as is". Diia directly states: if necessary, you must contact the authority that issued the license and cancel it. This is especially important for the trade in alcohol, tobacco products, liquids for electronic cigarettes, fuel, and other types of licensed activities. (Diia)

For licenses in areas administered by the tax office, the core legislation already provides for the submission of an application to terminate the license in paper or electronic form. Therefore, if you have such a license, check not only the fact of closing the FOP itself, but also the separate procedure for terminating the license so as not to leave open records in the registers. (Legislation of Ukraine)

If there were excise warehouses, storage locations, permits, equipment registrations, or other special records in the registers, you need to close not only the FOP, but also these statuses. Closing a FOP in itself does not mean that all accompanying registrations will disappear automatically without your actions or without the actions of the controlling body. (zp.tax.gov.ua)

If there are employees

If a FOP has hired employees, before terminating the business, it is necessary to terminate labor relations on proper grounds, issue orders, make a full settlement, and issue documents to the employees. On the day of dismissal, the employee must be given a copy of the dismissal order, and also notified in writing of the accrued amounts. All due amounts are paid on the day of dismissal, and if the employee did not work on that day - no later than the next day after their demand for settlement. (Legislation of Ukraine)

In addition to the dismissal itself, you must submit a tax calculation regarding income, PIT, military tax, and ESV for employees according to the current form of unified reporting. Its form and submission procedure are approved by the order of the Ministry of Finance No. 4 as amended by order No. 773. (Legislation of Ukraine)

Bank, acquiring, contracts, premises, goods

After the record in the EDR, be sure to close the FOP's bank account. This is a separate action that must be done through your bank; closure in the register does not automatically close the account. (Diia)

Separately review all valid contracts: premises lease, internet acquiring, POS terminals, delivery, marketplaces, CRM, accounting services, domains, hosting, security, mobile communications. Closing a FOP should not be perceived as a signal that all private contracts will terminate on their own. Therefore, check the termination deadlines, property return acts, mutual settlements, deposits, and penalties for early termination.

If goods are left, conduct an inventory. For ordinary goods, it is important to have origin documents and understand what happens to them after closure: sale, return to the supplier, transfer for personal use, write-off. For licensed or excisable goods, first check whether the law allows their further storage or sale after losing the FOP status and after the license expires. (od.tax.gov.ua)

Tax audit after closure

The tax office has the right to schedule a documentary unscheduled audit in case of termination of entrepreneurial activity of a FOP or submission of an application for deregistration. That is, closing a FOP does not mean there will be no more audits. (kyiv.tax.gov.ua)

Also, state registration of FOP termination does not terminate tax obligations that arose during the activity, and does not change the deadlines for their implementation, as well as the procedure for applying fines and penalties for violations, if any already exist. (cv.tax.gov.ua)

How long to keep documents after closure

Do not throw away documents immediately after closing. Primary documents, books, bank statements, contracts, acts, HR documents, RRO/PRRO archives, goods origin documents, as well as permits must be kept for at least 1095 days in cases defined by paragraph 44.3 of the Tax Code. For some categories of documents, the periods may be longer, but the practical minimum for most basic documents is exactly 1095 days. (zp.tax.gov.ua)

Short checklist before considering closure complete

Official sources

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