What percentage of the single tax should a sole proprietor in the second group choose?

For entrepreneurs in the second group, the single tax rate is up to 20% of the minimum wage set as of January 1 of the current year. In addition, local governments may set the rate below the maximum. In this regard, many entrepreneurs have a question: "Should I pay a single tax at the maximum rate or less?" Let's find out.

In 2021, the maximum single tax rate for entrepreneurs in the second group is UAH 1200 per month, as the minimum wage as of January 1 is UAH 6000. Local authorities have the right to set the single tax rate below the maximum at their discretion. The amount of the rate may depend on the type of activity and the place of business. In other words, if a sole proprietorship carries out two or more types of activities, it must apply the maximum rate established for such type of activity. If a sole proprietorship operates in more than one city, town or village, then the rate of 20% applies.

Place of business activity

When registering as a single tax payer, a future entrepreneur must fill in the "Place of business" column. If the sole proprietor does not know the exact address of his future business or plans to operate in different cities (for example, to open a chain of stores), or is thinking about moving, then the tax authorities allow him to write in the application "Place of business activity - Ukraine (trade in Ukraine or provision of services in Ukraine)".

In this case, such an entrepreneur must apply the maximum single tax rate of 20%. The same applies to sole proprietors who indicate the place of business: Ukrainian markets, Ukrainian exhibitions, transportation within Ukraine, international transportation, etc. For the inspector, this wording means that the entrepreneur will work not only in the city or village where he or she is registered, which means that such a sole proprietor must pay 20%.

If in the future the sole proprietor "settles" in one place, he can apply for the simplified taxation system and change his place of business to a specific address. Then the inspector will independently adjust the single tax rate from the maximum to the one set by the city authorities for the region.

A sole proprietor sends goods by mail

Let's consider the situation: A sole proprietor has opened an online store and sends goods by mail throughout Ukraine. He has one office and is registered in Kharkiv. For Kharkiv, the local authorities have set a single tax rate of 10%. How much should the entrepreneur pay: 10% or 20%?

In this situation, the entrepreneur will have to pay the maximum rate of 20%. This is the position taken by the tax authorities and supported by the courts. If the sole proprietor traded only in Kharkiv, he could apply the 10% rate, but in this case, his activities extend throughout the country.

A sole proprietor works at a place other than the place of registration

Let's consider the situation: A sole proprietor is registered in Kharkiv, but actually operates in Sumy. In both cities, the single tax rate is 10%. How much should the entrepreneur pay: 10% or 20%?

Here, as in the previous situation, the tax authorities insist on applying the maximum single tax rate of 20%. They equate the tax address with another place of business, meaning that they believe that the sole proprietor operates in two cities.

However, the court practice shows that in case of appealing such a decision, the court takes the side of the individual entrepreneur and sets the single tax rate at 10%, since the Tax Code states that the tax address and the place of business are different concepts.

A sole proprietor has several stores

Let's consider the situation: A sole proprietor is registered in Kharkiv and has opened several stores in the city. How much should the entrepreneur pay: 10% or 20%?

In this situation, the entrepreneur has to pay 10% because all his stores are located in the same city. However, if such a sole proprietor decides to expand his business and opens a store in the Kharkiv region, he will have to pay 20%.

A sole proprietor carries out several types of activities

Let's consider the situation: An individual entrepreneur is registered in Kharkiv and carries out several types of activities in the city. How much should the entrepreneur pay: 10% or 20%?

The TCU provides for the application of the highest single tax rate set by local authorities for the types of activities carried out by an individual entrepreneur. In other words, if an entrepreneur is engaged in several types of activities and each type of activity has its own single tax rate, the sole proprietor must choose the highest rate.

In our situation, in Kharkiv, the rate of 10% is set for all types of activities, which means that a sole proprietor must pay 10% of the minimum wage.