Rights and Obligations of Sole Proprietors in Retail and Online Trade

A sole proprietor (Ukrainian: ФОП, an individual entrepreneur) who sells goods in Ukraine must register the business, choose an eligible tax system, and organize records for goods and money. Before accepting the first payment, determine whether a fiscal receipt is required, check the permits for your product range, and prepare information for customers. Notify the tax authority about a shop or warehouse using Form No. 20-ОПП within 10 working days after its registration, establishment, or opening. These obligations also apply to sales through a website, marketplace, and social media.

While operating, the entrepreneur must support transactions with documents, file reports and pay applicable charges on time, formally hire employees before they start work, and handle customer requests in accordance with the law. At the same time, a sole proprietor has the right to obtain tax consultations, use reliefs when the conditions are met, verify inspectors’ authority, and appeal their decisions. The rules below apply to Ukraine and ordinary retail and online trade.

Before you start selling: register your business and check your tax status

Enter your actual business activities in the registers

To register as a sole proprietor, submit an application under Article 18 of Law No. 755-IV. You may also request to choose the simplified tax system or register as a value-added tax (VAT) payer. The tax authority registers the entrepreneur based on information from the state registrar under Article 65 of the Tax Code of Ukraine (TCU).

In practice, start by listing your operations: what you will sell, through which channels, whether you will manufacture goods yourself, and whether you will provide separate services. Select Classification of Economic Activities (KVED) codes for this list and check them in the Unified State Register of Legal Entities, Individual Entrepreneurs and Public Organizations (USR). If you choose the single tax, also compare your activities with the Register of Single Tax Payers.

An entry in the USR and registration as a single tax payer serve different purposes. Obtain an extract from the tax register and check your group, rate, start date, and registered activities. Under Clause 298.1.2 of the TCU, a newly registered sole proprietor who applies for the first or second group before the end of the registration month becomes a single tax payer the following month. For the third group without VAT, an application filed within 10 days of state registration allows the group to apply from the registration date. Account for sales made before the chosen regime takes effect under the regime that actually applied during that period.

Choose a group based on your trade format, income, and employees

The simplified tax system requirements are set out in Article 291 of the TCU. To calculate annual limits, use the minimum wage set as of January 1 of the relevant year. The limit applies to income determined under tax rules.

The Group 2 restriction on customer types applies to providing services: services may be provided to single tax payers and the public. It does not impose a general ban on selling goods to businesses on the general system or to foreign customers. The origin of ordinary goods also does not, by itself, disqualify a seller from Group 2. Separately check restrictions on the specific product and transaction.

For example, trade in jewelry and household items made of precious metals and stones is not allowed in Group 2: subject to the other requirements, Group 3 at a 5% rate is provided for this activity. Clause 291.5.1 of the TCU generally prohibits the simplified system for excisable goods, with specific exceptions, including retail sales of beer, cider, perry without added alcohol, and table wine. Tax eligibility for a product does not remove licensing requirements.

Group 4 is intended for agricultural commodity producers that meet special criteria. An ordinary shop reselling food products does not qualify for this group based on its product range. Groups 1–3 must settle payments for shipped goods in monetary form under Clause 291.6 of the TCU.

Prepare a bank account, premises, and required permits

Under Clause 10 of Instruction No. 162 of the National Bank of Ukraine, an individual opens separate accounts for business activities and personal needs. Provide customers with the details of your business account for cashless payments. It is also advisable to pay for purchases and business expenses from that account so that bank statements make each transaction traceable.

For owned and rented assets and facilities used to conduct business, submit an application on Form No. 20-ОПП concerning taxable objects or objects related to taxation or through which business is conducted. For a shop, warehouse, or other relevant site, the deadline is 10 working days after its registration, establishment, or opening. The same procedure and deadline apply when the location, type, name, status, or rights to an object change — Clauses 8.4–8.5 of Procedure No. 1588.

Use the current form: it has separate address fields, including street type and name, building or office number, number suffix, block, and apartment. After filing, check that the object appears in the private section of the Electronic Cabinet. If the object is in a different tax jurisdiction, also check that you are registered for tax purposes at that non-primary location.

You do not need a license for ordinary trade in clothing or stationery simply because you sell goods. For alcohol, tobacco products, liquids for electronic cigarettes, and fuel, first check the relevant license type and the exceptions in the special law. Article 41 of Law No. 3817-IX provides for separate licenses by activity, and for specified retail operations, a separate license for each trading location. Before adding a new product to your range, check that your tax regime allows its sale and whether it requires a license or other permit.

For food products, check the status of the location where they are stored or sold. Under Articles 23 and 25 of Law No. 771/97-VR, facilities that do not require an operating permit are subject to state registration. Submit the application no later than 10 calendar days before starting operations. Retail establishments are exempt from the operating permit requirement, but separate production or storage of products of animal origin must be assessed based on the actual activity and the exceptions in Article 23.

For every order: determine the payment method and required document

When an RRO or PRRO is required

A settlement transaction registrar (RRO) or software settlement transaction registrar (PRRO) is used depending on the actual payment transaction and any applicable legal exception. Under Articles 2 and 3 of Law No. 265/95-VR, settlement transactions must be processed for the full amount through a duly registered registrar, and the customer must receive a settlement document in paper or electronic form. This also applies to online orders. Use of a PRRO is prohibited for wholesale and retail fuel trade under paragraph 1 of Article 3 of this Law.

Group 1 single tax payers do not use an RRO or PRRO under Clause 296.10 of the TCU. Groups 2 and 3 have no general exemption allowing them to avoid issuing a fiscal receipt until they reach a certain turnover. Paragraph 14 of Article 9 of Law No. 265/95-VR concerns payments for services made exclusively through remote banking systems and/or money transfer services. This exception cannot be extended to all online goods sales.

If a fiscal receipt is not required, separately ensure that the customer receives purchase documentation. Part 11 of Article 8 of Law No. 1023-XII requires a seller to issue or create electronically a settlement document bearing the sale date no later than the transfer of the goods. Depending on the transaction, this may be a properly prepared sales receipt or another document provided for by law; exemption from the RRO requirement does not, by itself, remove this obligation.

In practice, prepare instructions for each payment method: who verifies that payment arrived, who creates the receipt, and how the customer receives it. At the end of a day on which settlement transactions took place, create a fiscal report receipt and check that the data has been transmitted. If the PRRO malfunctions, stop settlement transactions until it is fixed and, within the day the malfunction is discovered, notify the tax authority, the PRRO manufacturer, and/or the service center, if any, in the prescribed electronic form.

Loss of connection with the fiscal server has a separate procedure: offline operation requires a range of fiscal numbers obtained in advance. Indicate on every settlement document that the transaction was processed offline. Within one hour after connectivity is restored, send copies of the offline settlement documents to the fiscal server and notify the tax authority of the date and time the offline transactions began and ended.

Send the documents before submitting the fiscal report and fiscal report receipt for the relevant day, and retain them in the PRRO until delivery is confirmed. Under Article 5, the general offline limits are 36 consecutive hours and 168 hours during a calendar month. Paragraph 13 of Section II of Law No. 265/95-VR allows those limits to be exceeded during martial law, a state of emergency, or force majeure; the other requirements of the offline regime still apply.

For failure to process a settlement transaction properly, processing it for less than the full amount, or failing to issue the relevant document, paragraph 1 of Article 17 of Law No. 265/95-VR provides a penalty of 100% of the sale amount for a first violation and 150% for each subsequent violation. The territorial exemption from liability under paragraph 14 of Section II has its own conditions, periods, and exception for excisable goods. It does not mean that the obligation to use a registrar has been generally abolished.

Make cashless payments available

The obligation to accept cashless payment must be checked separately from the obligation to use an RRO. Resolution No. 894 of the Cabinet of Ministers of Ukraine also covers distance sales. For ordinary merchants, the general implementation deadlines have already passed for localities of every population size, so a shop in a small village must also meet this requirement unless an exemption applies.

For Group 1 single tax payers, vending machine sales, mobile trading, sales from stalls or counters outside retail premises, and sales of products grown or raised by the seller, the requirement takes effect three months after martial law is terminated or lifted. The Resolution also provides for a territorial exception. When choosing a technical solution, check that it meets the requirement to enable cashless payments: the Resolution provides for electronic payment instruments, payment applications, and payment devices.

When goods arrive and are sold: keep documents and maintain required records

Determine whether Procedure No. 496 applies to you

Mandatory inventory records under Order No. 496 of the Ministry of Finance of Ukraine do not automatically apply to every sole proprietor. Their application follows from paragraph 12 of Article 3 of Law No. 265/95-VR. For entrepreneurs covered by this provision, recordkeeping is mandatory under the general system and for VAT payers. Sole proprietors on the single tax without VAT are exempt, except those who sell:

• technically complex household goods subject to warranty repair;
• medicinal products and medical devices;
• jewelry and household items made of precious metals, precious stones, stones of organic origin, and semi-precious stones.

The exception is framed in terms of an entrepreneur conducting the relevant activity. Therefore, if your product range is mixed, do not limit records to a few special items while leaving other goods outside the required procedure.

If recordkeeping is mandatory, organize intake as follows: the responsible employee checks the actual goods against the primary document, verifies the supplier, descriptions, quantities, and values, then enters the receipt in the Record Form before sales begin. For multiple sales locations, keep records for each one and document internal transfers. On the date the obligation arises, record existing stock based on an inventory list prepared under Procedure No.

496. Thereafter, also record documented disposals in the Record Form: sales paid for by cashless payment without using an RRO or PRRO in cases established by law, internal transfers, returns to suppliers, destruction, loss, and use of goods for personal needs. Sales through an RRO or PRRO are not entered in the disposal column of this Form.

The Form may be maintained on paper or electronically. Primary documents supporting entries are integral appendices to the Record Form. Keep the Record Form and primary documents for goods at the sales location until the last unit of goods listed in the relevant documents has been disposed of. If originals of primary documents are not there during an inspection, you may provide copies and, if needed, present the originals before the inspection ends. During an inspection, an electronic form must be displayed in a format suitable for viewing and copying. An ordinary stock table in a software program meets this requirement only if the organized recordkeeping complies with all conditions of the Procedure.

Support tax figures regardless of inventory recordkeeping

Exemption from Procedure No. 496 does not remove the requirements of Article 44 of the TCU: tax reporting figures must be supported by documents. Entrepreneurs on the general system must also have documents showing the origin of goods under Clause 177.10 of the TCU. Keep supplier invoices, payment documents, bank statements, sales documents, customer requests, and proof of refunds that support the relevant transactions.

For ordinary sole proprietor documents that do not fall within the special categories in subclauses 44.3.1–44.3.2 of the TCU, the minimum retention period under subclause 44.3.3 is 1095 days. For documents used in tax filings, count from the date the filing is submitted; if it is not filed, count from its filing deadline. For documents concerning other legislation monitored by the tax authority, a separate rule counts the retention period from the transaction date; for permits, it counts from the end of their validity period.

Do not destroy documents simply because three calendar years have passed. The periods are extended in the cases specified in Clause 102.3 of the TCU; retain documents related to an inspection until it ends and the statutory appeal period for decisions issued as a result has expired. If a decision is appealed, retain documents until the administrative appeal is completed and/or the court case is resolved.

In every case, also comply with the minimum retention period under Clause 44.3 of the TCU. Other applicable requirements may also require longer retention. If documents are lost or damaged, Clause 44.5 of the TCU requires written notification to the tax authority within five days, with evidence of the event, and restoration of the documents within 90 calendar days from the day after the notice is received.

For customers: prepare information, delivery, and returns

The consumer rights below apply to an individual who buys goods for personal needs not directly related to business or the duties of an employee. If goods are purchased for a business, set delivery, warranty, and return terms under the contract and applicable civil law. For food products, Law No. 1023-XII applies only in cases it expressly provides for, under Article 1-1. Therefore, do not automatically apply the general rules below for distance contracts and warranties to food sales. The obligation to replace an unfit food product or refund the money is expressly established in Part 8 of Article 8.

Provide information before the order is placed

Under Article 15 of Law No. 1023-XII, the customer must receive the necessary information before purchasing goods. Check the product name and main characteristics, nominal quantity, production date, price including mandatory charges, purchase terms, safe use and storage conditions, expiry date or service life, actions required after it expires, and warranty obligations. The customer must also have access to the names and locations of the manufacturer, seller, and business that accepts claims and performs repairs.

State the price per unit of goods or relevant category and per standard unit of product under Part 3 of Article 15. Separate product categories have specific information and labeling requirements. Provide product information in compliance with language laws. Under Part 14 of Article 11 of Law No. 675-VIII, an offer to conclude an electronic contract, the contract text, and electronic messages must be in Ukrainian; at the customer’s request, the parties may agree to another language for the electronic contract.

An online store must additionally provide access to the entrepreneur’s surname, first name, and patronymic, place of registration and actual residence, taxpayer registration number, email address and/or online store address. If the entrepreneur has lawfully declined a taxpayer number on religious grounds and has the relevant passport notation, state the passport series and number. If the activity requires licensing, publish the license details: series, number, validity period, and date of issue. Also state whether taxes are included in the price and, if delivery is available, its cost. These are the requirements of Article 7 of Law No. 675-VIII “On Electronic Commerce”.

The seller must promptly confirm receipt of the order through the information system under Article 11 of Law No. 675-VIII. The customer must also receive confirmation of the electronic transaction when it is made or when the goods are transferred. This document must state the exchange and return terms, the seller’s details and location, the procedure for accepting claims, warranty obligations, and other information required by Part 11 of this Article.

Before concluding a distance contract, provide the customer with the information listed in Part 2 of Article 13 of Law No. 1023-XII: seller details and how to submit claims, main product characteristics, price including delivery, payment and delivery terms, warranty obligations and related services, the period during which the offer is open, and the procedure for terminating the contract. For recurring deliveries, state the minimum contract duration and, where applicable, the cost of electronic communications services if it differs from the maximum tariff.

Confirm that this information was provided in writing or by electronic message; after confirmation, the seller may not change it unilaterally. In practice, retain the confirmation sent and the version of the terms accepted by the customer.

Unless the parties agree otherwise, goods ordered remotely must be delivered within a reasonable time, but no later than 30 days after the customer agrees to conclude the contract. If the ordered goods are unavailable and the seller cannot perform the contract, the seller must notify the customer immediately and no later than 30 days after receiving the customer’s agreement to conclude the contract. Therefore, check availability before confirming payment and give the customer a realistic dispatch date.

Distinguish three grounds for a customer’s request about a product

The list of goods of proper quality that cannot be exchanged on this basis appears in Appendix 3 to Resolution No. 172 of the Cabinet of Ministers of Ukraine. Inclusion on this list does not cancel customer claims concerning deficient quality. For withdrawal from a distance contract, separately check the exceptions in Part 5 of Article 13. Unless the contract grants broader customer rights, the right to withdraw does not, among other things, apply to custom-made or processed goods that cannot be sold to another person or can only be sold at substantial financial loss, sealed audio or video cassettes or software media opened by the customer, or delivery of periodicals.

Under Part 7 of Article 12, the customer must keep the received product unchanged. At the same time, opening the packaging, examining, or testing a product in a way that reduces its value does not, by itself, deprive the customer of the right to terminate the contract. The right also remains if the product is damaged, destroyed, or spoiled through no fault of the customer. The seller must arrange its return: under Part 5 of Article 12, the customer’s obligation to keep the product ends 60 days after receipt; if the seller has not taken steps to have it returned within that period, it becomes the customer’s property without any obligation to pay for it.

When a customer contacts you, record the date, product, purchase document, problem description, and the specific request. Under Part 14 of Article 8, the customer may personally or through a representative participate in a quality inspection. If the cause of a loss of quality must be established during the warranty period, under Part 4 of Article 17 of Law No. 1023-XII the seller must arrange an expert examination within three days after receiving the customer’s written consent and initially pay for it.

If the expert examination proves that defects arose after the product was transferred because the customer breached use, storage, or transportation rules, or because of actions by third parties, the customer reimburses the examination costs and the relevant claims are not satisfied. Either party may challenge the expert findings in court.

Replace goods within the required period

If the customer is entitled to replacement of a defective product and chooses this remedy, the seller must replace it immediately if it is in stock. If quality inspection is required, the deadline is 14 days or another period agreed by the parties. If the product is unavailable, the seller must fulfill the request within two months from the date it was filed. If replacement is impossible within that period, the customer may choose another remedy under Article 8.

When replacing with a product of the same brand, model, article number, and modification, the price is not recalculated. When replacing with the same product of a different brand, model, article number, or modification, the value of the returned product is determined at the time of exchange if the price has increased, or at the time of purchase if the price has decreased.

Check documents and the warranty period

To consider a claim about defects, check the settlement document and, for goods with a warranty period, the technical passport or substitute document bearing the sale date: these requirements are set out in Part 11 of Article 8 of Law No. 1023-XII. Operating documents and warranty obligations for technically complex household goods may be provided electronically under Parts 10 and 11 of Article 7. At the customer’s request, the seller registers the product on the manufacturer’s official website at the time of sale and issues an electronic warranty; at the customer’s request, the seller also provides paper operating documents.

After checking the documents, determine the period for making a claim. Under Article 7 of Law No. 1023-XII, if no warranty period or expiry date is set, the customer may make relevant claims for defects found within two years of the transfer of the goods. For distance sales, the warranty period usually begins when the goods are transferred; for goods requiring special installation or assembly, it begins when that work is completed.

For seasonal goods, account for the start of the relevant season under Appendix 1 to Resolution No. 172 of the Cabinet of Ministers of Ukraine. After warranty repair, the period is extended by the time the product was under repair, counted from the customer’s request, and after replacement it starts again. Expiry of the warranty period does not always end the customer’s right to request free repair.

Under Part 10 of Article 8, the consumer may submit this request to the seller or manufacturer during the established service life, or, if no service life is set, within ten years, if the defects arose through the manufacturer’s fault. If the request is not fulfilled within the period specified in Part 9 of this Article, the consumer may choose another remedy under Part 1 of Article 8.

Arrange repairs and provide a product for temporary replacement

The seller or manufacturer must repair defects free of charge within 14 days from the date the product is presented, unless the parties agree on another period. If the product is on the list in Appendix 2 to Resolution No. 172 of the Cabinet of Ministers of Ukraine, then, upon the consumer’s written request, a product of the same brand from the replacement stock must be provided with delivery while repairs are underway.

Part 9 of Article 8 provides for a penalty of 1% of the product’s value for each day of delay in fulfilling the temporary replacement request and for each day repair takes longer than the applicable period. For bulky goods or goods weighing more than five kilograms, delivery is paid by the seller or manufacturer in the cases specified in this Article.

After making a decision, document the movement of goods, refund, and relevant settlement transaction. For refunds and returns following withdrawal from a distance contract, apply Parts 5–9 of Article 12 of Law No. 1023-XII, to which Part 7 of Article 13 expressly refers. If the seller did not provide a document or confirmation of information, the consumer notifies the seller that the contract is invalid.

In this case, Part 6 of Article 12 requires the seller to refund the money and reimburse the cost of returning the goods within 30 days after receiving the notice. If the seller misses this refund deadline, Part 9 of Article 12 provides for a penalty to the customer of 1% of the product’s value for each day of delay. This provision also applies to distance contracts under Part 7 of Article 13.

Under Part 5 of Article 12, the seller bears the cost of returning goods when a distance contract is terminated. Practical recommendation: arrange the refund as soon as you receive the customer’s notice and agree on how it will be paid. Under Articles 8 and 9, money is refunded on the day the contract is terminated or, if that is impossible, within a period agreed by the parties but no later than seven days.

Under Article 9, the amount is based on the product’s value at the time of purchase. When a contract is terminated for deficient quality under Article 8, if the price has increased, the refund is based on the product’s value when the claim was made; if the price has decreased, it is based on the value at purchase. The shop’s terms and accounting software settings must reflect customers’ legal rights.

The rules for these claims are established by Law No. 1023-XII. The main provisions of Law No. 3153-IX have a deferred effective date linked, among other things, to the termination or lifting of martial law. Until the conditions set out in its final provisions occur, they are not applied as current seller obligations.

Collect only necessary personal data

Under Articles 6 and 11 of Law No. 2297-VI, data processing must have a specific lawful purpose and legal basis. Such a basis may be performance of a contract or a legal obligation; customer consent is one possible basis. For an order, determine which data is needed for contact, delivery, and documents, and do not add unnecessary required fields.

Separately describe the use of data for a loyalty program or messages if you plan these activities. Limit employee access according to their duties, set reasonable retention periods, and check the legal grounds for transferring data to a carrier or another person under Article 14 of this Law.

Before an employee’s first shift: formalize the employment relationship

Under Article 24 of the Labor Code of Ukraine, an employee may not start work without an employment agreement formalized by an order or directive and notice of hiring submitted under the established procedure. Complete this before a sales assistant starts serving customers, including during a probationary period.

The general rule for an agreement with an individual requires a written form. At the same time, Article 2 of Law No. 2136-IX allows the parties to determine the form of an employment agreement by mutual consent during martial law. In practice, a written description of the position, pay, schedule, and duties helps confirm the arrangement. The special rule on the form of the agreement does not cancel the requirement to formalize hiring and submit notice before work begins.

Organize records of work performed, salary accrual and payment, withholding of personal income tax (PIT) and military levy, accrual of the single contribution for compulsory state social insurance (USC), and the relevant reporting. Under Clause 177.7 of the TCU, a sole proprietor acts as a tax agent for taxable payments to individuals. For Group 2, also monitor the number of employees, taking account of the exceptions in Clause 291.4.1 of the TCU.

Monthly, quarterly, and annually: reconcile income, taxes, and contributions

Calculate payments under your regime

For Groups 1 and 2, find the local council decision setting the rate for your specific activities. If there are several activities, the highest rate set for them applies; for activity in territories under more than one council, the maximum rate for the relevant group under Article 293 of the TCU applies. For Group 4, the military levy is also 10% of the minimum wage as of January 1 of the year per month, but the group itself requires a separate check of the farming criteria.

Under paragraph 16-1 of Subsection 10 of Section XX of the TCU, the military levy for single tax payers applies until December 31 of the third calendar year following the year in which martial law is terminated or lifted. For income of sole proprietors on the general system after this period ends, a rate of 1.5% instead of 5% is provided. Take these conditions into account when preparing a calendar of future payments.

Under the general system, the taxable result is the difference between total taxable income and documented expenses allowable under Article 177 of the TCU. The account balance does not show this figure. Under the single tax, purchases of goods and other expenses generally do not reduce the single tax base: income is determined under Article 292 of the TCU, including its special rules and exclusions.

Illustrative example. A Group 3 sole proprietor without VAT received UAH 200,000 in income for a quarter, all of which is included in the bases for the single tax and military levy. The single tax is UAH 200,000 × 5% = UAH 10,000; the military levy is UAH 200,000 × 1% = UAH 2,000. Together, these two payments total UAH 12,000. Purchasing goods for UAH 120,000 does not reduce this base. USC and other applicable liabilities are calculated separately.

Under the general system, monitor VAT separately. Under Articles 181 and 183 of the TCU, taxable supplies exceeding UAH 1,000,000 excluding VAT during the last 12 calendar months create a registration obligation; submit the application no later than the 10th day of the following month. Single tax payers in Groups 1–3 are exempt from this requirement. Special rules in Article 183.4 apply when transitioning from the simplified system. A VAT payer keeps the relevant records separately because the time a tax liability arises does not always coincide with receipt of money.

Check USC for each month

Under Articles 7 and 8 of Law No. 2464-VI, the standard USC rate payable by a sole proprietor on their own behalf is 22% of the established base. Under the simplified system, the entrepreneur sets the base independently within legal limits, and unless exempt, the contribution cannot be less than the minimum insurance contribution. Its formula is: minimum wage for the relevant month × 22%. Check the maximum base under the current state budget law.

Under the general system, the base is income or profit subject to PIT; for a month with such income, the contribution cannot be less than the minimum. If there is no taxable income, Article 7 allows the entrepreneur to set the base independently within established limits. Do not apply a general right for all entrepreneurs to avoid USC merely because martial law is in effect: the operation of the relevant paragraph 9-19 of Section VIII of Law No. 2464-VI has been suspended by the budget law.

Article 4 of Law No. 2464-VI exempts from USC on their own behalf persons receiving an old-age pension or a pension for years of service, persons with disabilities, and persons who have reached the age under Article 26 of the law on pension insurance and receive the relevant pension or social assistance. For an entrepreneur whose employer has paid at least the minimum contribution, the exemption applies for the relevant months. If the employer paid less than the minimum, Part 6 of Article 4 provides for the possibility of independently setting the base for those months within the established minimum and maximum limits. Therefore, check the actual payment for each month.

Prepare a calendar with supporting documents

Article 16 of the TCU requires taxpayers to keep records, file required reports, and pay taxes on time. Groups 1 and 2 and Group 3 without VAT keep income records in any form, showing income by month. Group 3 with VAT keeps income and expense records using the prescribed standard form; Article 177 requirements apply to the general system.

In Ukraine, individual entrepreneurs (FOPs) in the third group of the single tax generally file a single tax payer return within 40 calendar days after the end of each quarter, while those in the first and second groups file within 60 calendar days after the end of the year. FOPs on the general taxation system file an annual income and property status tax return before May 1 of the following year.

These deadlines are set out in Article 49 and clauses 296.2, 296.3, and 177.11 of the Tax Code of Ukraine. Special rules apply when a first- or second-group FOP is required to report quarterly, and to reporting when entrepreneurial activity is terminated. Recommendation: enter the specific filing deadline in your calendar, taking clause 49.20 into account: if the final filing day falls on a weekend or public holiday, the deadline moves to the next operational day following that weekend or public holiday.

For each return, enter the specific deadline in your calendar under the relevant reporting period, Article 49 of the TCU, and current form. Keep proof that the return was accepted. Exceeding the limit or changing groups may create a quarterly reporting obligation even for Groups 1 and 2. Add employee and VAT obligations to the calendar separately.

If there are no sales, check the basis for each exemption

No income in Group 1 or 2 does not, by itself, cancel the fixed single tax and military levy. A sole proprietor in these groups with no hired employees is entitled to exemption from both payments for one calendar month of vacation per year and for a period of illness lasting 30 or more calendar days. Submit an application and, for illness, attach an extract from the Electronic Register of Sick Leave Certificates — Clause 295.5, subclause 298.3.2, and subclause 1.13 of paragraph 16-1 of Subsection 10 of Section XX of the TCU.

For Group 3, if there is no income under Article 292, there is no base for the percentage-based single tax or military levy, but USC must be assessed separately. The territorial right not to pay the military levy for Groups 1 and 2 under subclause 1.12 depends on the tax address on the date set by law, the territory’s status, and the relevant period. Before applying it, keep information about the address, data from the official list of territories referenced in the provision, and the month-by-month calculation. A move may change eligibility for the relief. The conditions for one payment cannot automatically be applied to another.

When you change your business activity or address, or close the business

Before starting a new line of sales, check the KVED in the USR and the activity in the Register of Single Tax Payers. For Groups 1 and 2, income from an activity not listed in the tax register is subject to a special 15% rate. Articles 298–299 of the TCU also provide for mandatory transition from the single tax and cancellation of registration for specified violations. In practice, it is safer to add the relevant activity before the first corresponding transaction.

When the tax address, place of trade, or types of activity change, Groups 1 and 2 must submit an application no later than the 20th day of the following month under Clause 298.5 of the TCU. Group 3 must submit an application when the tax address or place of activity changes no later than the last day of the quarter in which the changes occurred under Clause 298.6. Moving a shop or warehouse also requires an updated Form No. 20-ОПП; separately check the cash register registration details and special permits, if used.

For a voluntary change of group, if the criteria are met, the general application deadline is at least 15 calendar days before the next quarter. To leave the simplified system, submit an application no later than 10 calendar days before the new quarter or year. Changing the Group 3 rate by switching to VAT has special deadlines under Article 293.8, so plan it together with VAT registration.

If you exceed the annual limit, record the date and amount of the excess. Under Clause 293.8 of the TCU, the sole proprietor applies the 15% single tax rate to the amount exceeding the limit. Starting in the next calendar quarter, a Group 1 payer moves to Group 2 or 3, if eligible, or leaves the simplified system. A Group 2 payer moves to Group 3 if eligible or leaves the simplified system. A Group 3 payer must move to the general system. Submit the relevant application no later than the 20th day of the month following the quarter of excess.

To cease operations, submit an application for state registration of termination as a sole proprietor. Under Clause 65.10 of the TCU, the termination entry does not end obligations that arose during the business activity. After the entry, complete settlements, file the required final reports, fulfill tax and insurance obligations, and ensure document retention.

1. Record stock, unfulfilled orders, returns, customer and supplier debts.
2. Check the state termination date and the cancellation date of single tax registration. For the fixed single tax, Clause 295.8 of the TCU provides for accrual through the end of the relevant month.
3. Determine the final reporting period under your regime. Under the general system, the final business return is filed under monthly deadlines under Clause 177.11 of the TCU; for the single tax, the period is determined by Clause 294.6.
4. Check that employment relationships and settlements with employees have been completed, if applicable.
5. Complete required actions regarding business assets and facilities, cash registers, and permits. For a registered food facility, Article 25 of Law No. 771/97-VR requires notice of cessation of use within 10 working days.
6. Retain reports, receipts, statements, and primary documents in accordance with retention periods, extensions, possible inspections, and special archiving rules on termination.

During a tax inspection: check documents and record your position

Article 17 of the TCU gives an entrepreneur the right to represent their interests personally or through an authorized representative, be present during an inspection, provide explanations, receive the inspection report, and submit objections. For an on-site documentary inspection and a factual tax inspection, Article 81 of the TCU requires inspectors to present an assignment, a copy of the order, and official identification or proper documents confirming their status.

Check that the inspectors match the assignment and verify the sole proprietor or site details, type, grounds, start date, and duration of the inspection. Failure to present required documents or defects in their preparation under Clause 81.1 may be grounds for refusing admission. That clause does not allow refusal on other grounds. A factual tax inspection under Article 80 may take place without prior notice, so the lack of advance notice does not, by itself, prove a violation.

After the inspection begins, provide documents related to its subject under Article 85 of the TCU. Outside an inspection, a written request for documents must contain a specific list and legal grounds under subclause 16.1.5. Document the transfer of copies with an inventory and keep your own copy. As a general rule, originals may not be seized; exceptions are established by criminal procedure law. Under subclause 17.1.17 of the TCU, an entrepreneur may openly make photo, video, and audio recordings of the inspection.

If you disagree with the report, sign it with a reservation and state your arguments, referring to transactions and documents. The general deadline for objections under Clause 86.7 of the TCU is 10 working days from the day following receipt of the report. A special deadline of five working days applies to a report from an additional inspection under subclause 78.1.5. Refusing to sign or receive the report does not replace filing objections.

A tax notice-decision or other decision may be appealed administratively or in court under Article 56 of the TCU. The general deadline for an administrative appeal is 10 working days after the day the decision is received. It is useful to attach your own calculation, copies of supporting documents, and an explanation of the tax authority’s error. Immediately save proof of the date you received the decision and check the procedure and deadlines that apply to that specific decision.

Get an individual consultation before a disputed transaction

Under Article 52 of the TCU, a sole proprietor may obtain free individual tax advice (ITA) on the practical application of a provision. In your request, state your surname, first name, and patronymic, tax address, taxpayer registration number or passport details provided for by law, as well as a telephone number and email address, if available. Describe the facts and practical need for the consultation, add the date and a valid signature. The general response period is 25 calendar days after receipt of the request; it may be extended by no more than 15 calendar days with proper notice.

For a payment question, describe the contract, the parties, how payment is accepted, and the documents the customer receives. For future use, it is advisable to choose a paper or electronic ITA registered in the unified register. It is individual and intended for the taxpayer to whom it is issued. Article 53 expressly states that following the consultation does not exempt the taxpayer from paying a tax liability. Apply its conclusion to the relevant facts and current rules.

Inventory, sales, and returns for sole proprietors in Torgsoft

Torgsoft can be used for daily inventory records: in “Стан складу” (Warehouse Status, the inventory screen), you can view quantity, price, cost, and goods movement after receipt, sale, return, or transfer. A practical workflow is to enter received goods based on supplier documents, record every sale in “Реалізації” (Sales, the sales screen), and reconcile actual stock with the software’s records. For multiple warehouses or an online store, consider license capabilities: “Старт” (Start) has one inventory center and does not support transfers between warehouses or an online store.

For a product return, you can find the relevant sale, select the products and quantities, create a return invoice, and separately record the refund. The maximum return period configured in the software must align with the legal basis for the customer’s request. Software records help reconcile goods and payments; the entrepreneur remains responsible for meeting the requirements for primary documents, tax records, and a proper fiscal receipt.

Shop owner’s checklist

Assign a responsible person and a verifiable result to each action. If you work alone, use this table as a list of regular checks.

Official sources for checking your transactions

• Tax Code of Ukraine No. 2755-VI: Articles 16–17, 44, 49, 52–53, 56, 63, 65, 75, 78, 80–81, 85–86, 167, 177, 181–183, 187, 291–296, 298–299; paragraph 16-1 of Subsection 10 of Section XX.
• Law No. 755-IV on state registration of legal entities, individual entrepreneurs, and public organizations: Article 18.
• Procedure for Registration of Taxpayers and Fee Payers, Order No. 1588 of the Ministry of Finance of Ukraine: Section VIII, Appendix 10 — Form No. 20-ОПП.
• Instruction on the procedure for account-servicing payment service providers to open and close users’ accounts, Resolution No. 162 of the Board of the National Bank of Ukraine: Clause 10.
• Law No. 265/95-VR on the use of settlement transaction registrars: Articles 2–3, 5, 9–10, 17, 20; paragraphs 13–14 of Section II.
• Procedure for keeping inventory records for individual entrepreneurs, Order No. 496 of the Ministry of Finance of Ukraine: Sections I–II and the Record Form.
• Resolution No. 894 of the Cabinet of Ministers of Ukraine on ensuring cashless payments: paragraphs 1–2.
• Law No. 2464-VI on the collection and accounting of the single contribution for compulsory state social insurance: Articles 4, 7–9; Section VIII.
• Law on the State Budget of Ukraine No. 4695-IX: Article 32 and provisions suspending paragraph 9-19 of Section VIII of Law No. 2464-VI.
• Labor Code of Ukraine No. 322-VIII: Articles 21 and 24; Law No. 2136-IX on the organization of labor relations under martial law: Article 2.
• Law No. 1023-XII “On Consumer Protection”: Articles 8–9, 12–13, 15; Resolution No. 172 of the Cabinet of Ministers of Ukraine: Appendices 2–3.
• Law No. 3153-IX “On Consumer Protection”: final and transitional provisions on its effective date.
• Law No. 675-VIII “On Electronic Commerce”: Articles 7, 11, 13; Law No. 2297-VI “On Personal Data Protection”: Articles 6, 11, 14.
• Law No. 3817-IX on state regulation of the production and circulation of alcohol, alcoholic beverages, tobacco products, liquids for electronic cigarettes, and fuel: Article 41.
• Law No. 771/97-VR “On the Basic Principles and Requirements for Food Safety and Quality”: Articles 23 and 25.