How a Sole Proprietor Can Change Their KVED Code to NACE 2.1-UA in 2027

How a Sole Proprietorship can change KVED to NACE 2.1-UA in 2027: what to do with the USR and single tax

From January 1, 2027, Ukraine will introduce the new Classification of Economic Activities NACE 2.1-UA. It will gradually replace KVED DK 009:2010. Entrepreneurs do not need to remove their current KVED codes in advance: during 2027, KVED-2010 and NACE 2.1-UA are expected to be used in parallel, while government information systems will transition gradually. Sole Proprietorships should already compare their current KVED codes with the new classification and determine which codes have a direct correspondence and which will need to be selected again due to the division, merger, or change in the scope of classes.

For Sole Proprietorships on the single tax system, it is important not only to correctly update the information in the Unified State Register but also to make sure that the actual types of activities are specified in the register of single tax payers. An activity code itself is not a permit or license; however, the Tax Code establishes specific consequences for conducting activities that are not included in the register of single tax payers. For the first and second groups, this includes, in particular, a 15% rate on the relevant income; for the first through third groups, an obligation to leave the simplified taxation system may arise.

What is NACE 2.1-UA and when will it replace KVED-2010

NACE 2.1-UA is the new Ukrainian version of the classification of economic activities that implements the European NACE Rev. 2.1. The State Statistics Service approved it by Order No. 191 dated October 28, 2025, and set the effective date as January 1, 2027.

The transition is planned in several stages. In 2026, government authorities will adapt their methodology and information systems. In 2027, NACE 2.1-UA will begin to be used in statistical activities, statistical registers will be recoded, and correspondence between the old and new classifications will be ensured. For 2028, the State Statistics Service has planned the full use of NACE 2.1-UA in state statistical surveys and the completion of the transition of information and reporting systems.

At the same time, KVED-2010 will not cease to be used immediately on January 1, 2027. The State Tax Service reports that KVED-2010 and NACE 2.1-UA will be used in parallel throughout 2027. Tax legislation is also still being adapted: the current paragraph 298.3 of the Tax Code still explicitly requires that the types of activities under KVED DK 009:2010 be specified in the single tax payer application, while the State Tax Service has reported that draft amendments to the Code have been prepared for the transition to NACE 2.1-UA.

Therefore, January 1, 2027 should not be regarded as a deadline by which every Sole Proprietorship must independently remove all old KVED codes and register new ones. The procedure will depend on the correspondence between a specific old code and the new classification and on the readiness of the USR, Diia, and tax information systems.

How NACE 2.1-UA differs from KVED-2010

This is not simply a renaming of codes. The classification structure is changing: the number of sections increases from 21 to 22, groups from 272 to 287, and classes from 615 to 651. Some old classes have been merged, some have been divided into several new ones, and certain types of activities have been moved within the classification structure.

The following changes are particularly important for small businesses:

Thus, one of the most commonly used codes for online trade today, 47.91, can no longer be regarded as a universal «KVED for an online store» after the transition. NACE 2.1-UA abandons the principle whereby the method of sale determines a separate retail class: an online clothing store, an electronics store, and an online cosmetics seller must be classified according to the relevant product specialization.

Does a Sole Proprietorship need to change KVED to NACE now

Prepare — yes. Remove current KVED codes solely because of the future transition — no.

The State Statistics Service has already published correspondence tables between KVED-2010 and NACE 2.1-UA. They can be used to check each entrepreneur's code. It is important to assess not only the number and name of the code but also the actual business activity: what exactly the Sole Proprietorship sells, produces, or what services it provides.

There are three main possible situations:

1. One-to-one correspondence. One old KVED corresponds to one new code without a significant change in meaning. The State Statistics Service expects that a significant part of such recoding in statistical registers will take place automatically.

2. One old code is divided into several new ones. The Sole Proprietorship must determine which of the new classes corresponds to its actual activity. If the entrepreneur simultaneously operates in several areas, several NACE codes may be required.

3. Codes are merged or activities are redistributed among different classes. In this case, the actual nature of operations must also be analyzed rather than transferring the old number by analogy.

Particular attention should be paid to online trade, intermediation services, motor vehicle trade, IT and telecommunications, restaurant business, certain manufacturing activities, and activities for which old classes have been divided.

How a Sole Proprietorship can prepare its KVED codes for the transition to NACE 2.1-UA

First, obtain an up-to-date list of the Sole Proprietorship's activities from the USR. A single tax payer should separately check the «Taxpayer registration data» in the State Tax Service Electronic Cabinet or obtain an extract from the register of single tax payers. The lists should be compared.

Then, for each current KVED, you should:

• find the corresponding code in the State Statistics Service table;

• read not only the name but also the scope of the new NACE class;

• determine whether the correspondence is direct;

• if the old class has been divided, select the code according to the actual activity;

• check which activity is the primary one;

• check whether the actual activity is permitted for the selected single tax group;

• if the activity is licensed or requires a permit, separately check the requirements of special legislation.

The official correspondence tables are published by the State Statistics Service. These, rather than random online KVED converters, should be used to prepare for the transition.

How to change a Sole Proprietorship's activities in the USR

Currently, a Sole Proprietorship can change its existing KVED codes online through the Diia portal. The entrepreneur completes an electronic application and signs it with Diia.Signature or another electronic signature, after which the information is submitted to the USR. Changes can also be submitted through an Administrative Services Center or the executive body of a local council; under certain conditions, documents may be sent by mail with a notarized signature.

The actual addition of NACE 2.1-UA to the USR will depend on the launch of the relevant functionality in the state registration system. The Notary Chamber of Ukraine reported that once the system is opened for registering the new codes, Sole Proprietorships will be able to submit the relevant applications to a state registrar or through Diia. At the same time, the State Statistics Service refers to automatic recoding of direct correspondences in statistical registers. Therefore, entrepreneurs should not confuse statistical recoding with the actual status of their registration data in the USR: after the transition is launched, they should check their own USR extract and submit an application only if necessary.

If an old code has been divided into several NACE classes, an automatic choice on behalf of the entrepreneur may be impossible because the state register needs to know which specific activity the Sole Proprietorship actually conducts.

What a Sole Proprietorship on the single tax system should do after changing its activity

For a single tax payer, the USR and the register of single tax payers have different purposes. NACE and KVED are classifiers, but the Tax Code separately requires business activities to be entered in the register of single tax payers. Paragraph 299.7 of the Tax Code explicitly provides for storing this information in the tax register.

Under the current Diia procedure, if a single tax payer changes a KVED online, an application to change the type of activity is automatically sent to the tax authority. After that, the entrepreneur should check the result in the Electronic Cabinet under «Taxpayer registration data». The fact that an electronic application has been sent does not replace checking that the required activity is actually reflected in the tax data.

The Tax Code establishes the following deadlines:

For the first and second groups, the deadline is explicitly established by paragraph 298.5 of the Tax Code. For the third group, paragraph 298.6 literally refers to changes in tax address and place of business, but not types of activities. At the same time, the State Tax Service requires in its explanations that an application be submitted by the end of the relevant quarter when activities change so that the register of single tax payers contains accurate information.

Therefore, the safest procedure for a Group 3 Sole Proprietorship is not to postpone adding the new activity to the tax register and to do so before actually starting that activity.

Can you start a new activity first and add the code later

For a single tax payer, this is risky. Subparagraph 7 of paragraph 298.2.3 of the Tax Code explicitly provides for an obligation to switch to the payment of other taxes and fees if an entrepreneur conducts activities not specified in the register of single tax payers. The transition takes place from the first day of the month following the tax reporting period in which such activity was conducted.

The tax reporting period for the first and second groups is a calendar year, and for the third group it is a calendar quarter. This is important for determining when the obligation to leave the simplified taxation system arises.

The safest rule for an entrepreneur is: first register the required activity and verify that it is reflected in the register of single tax payers, and only then actually start the relevant activity.

Is 15% payable for an activity that is not in the register of single tax payers

The rules differ for different groups.

For Sole Proprietorships in Groups 1 and 2, paragraph 293.4 of the Tax Code establishes a single tax rate of 15% on income received from activities not specified in the register of single tax payers. In addition, an obligation to leave the simplified taxation system may arise.

For Group 3 Sole Proprietorships, the specific provision on 15% for an «unregistered» activity does not apply: subparagraph 2 of paragraph 293.4 explicitly refers only to Groups 1 and 2. However, this does not mean that Group 3 can conduct any activity not included in the tax register without consequences. Subparagraph 298.2.3.7 of the Tax Code extends the obligation to leave the simplified taxation system to Group 3 as well, except for the special exception for e-residents.

Separately, the 15% rate may apply to a Group 3 Sole Proprietorship on other grounds explicitly provided for in paragraph 293.4 of the Tax Code, for example, to income from activities that do not qualify for the simplified taxation system at all. Therefore, checking a new NACE code cannot be reduced solely to whether the code is entered in the register: it is also necessary to check whether the activity itself is permitted for a single tax payer.

What happens if a violation is found during a tax audit

If, during an audit, the State Tax Service establishes a violation of the simplified taxation system rules by a payer in Groups 1–3, registration as a single tax payer may be cancelled by a decision of the supervisory authority based on the audit report. Paragraph 299.11 of the Tax Code provides for cancellation from the first day of the month following the quarter in which the violation occurred.

The consequence is significant: in such a case, the entrepreneur can return to the simplified taxation system only after four consecutive quarters have elapsed from the date the tax authority made the cancellation decision.

That is why, during the transition from KVED-2010 to NACE 2.1-UA, an entrepreneur should check not only the USR but also the tax register after every change.

Example from State Tax Service practice

In its explanation dated March 23, 2026, the State Tax Service specifically emphasized that a Group 3 Sole Proprietorship changing its activities must ensure that the relevant information is entered in the register of single tax payers. The tax authority refers to paragraph 298.3 of the Tax Code, under which a change in business activities is information submitted to update the tax register.

The practical conclusion for the transition to NACE is as follows: if a different code corresponds to a new actual business activity, operations in this area should not be started with the expectation of adding the code later.

How NACE will affect single tax rates for Groups 1 and 2

Fixed single tax rates for Groups 1 and 2 are established by local councils depending on the type of business activity within the limits defined by the Tax Code. If an entrepreneur in Group 1 or 2 conducts several types of activities, the maximum rate established for those activities applies.

Due to the transition to NACE, local authorities also need to adapt their decisions on local taxes. The State Tax Service has already drawn the attention of local governments to the need to take the new classification into account when establishing local taxes and fees.

Therefore, after the final transition, a Group 1 or Group 2 Sole Proprietorship should check not only the new code but also the decision of its local council regarding the single tax rate for the relevant activity.

Does the new NACE change licensing and permit requirements

Registration of a NACE code does not replace a license, permit, declaration of compliance of the material and technical facilities, or another special document if one is required for a particular activity.

By its nature, the classification of economic activities is a statistical tool. Official explanations regarding KVED explicitly state that the code itself does not create rights or obligations for an enterprise and is not sufficient evidence of compliance with the requirements of special legislation.

Therefore, after recoding a licensed activity, the law, licensing conditions, or another special act governing that particular business must be checked separately. If a regulation or licensing register contains the activity code as registration information, the information may need to be updated. There is no general rule requiring automatic reissuance of all licenses solely because NACE is introduced.

Does the transition to NACE affect ECRs and pECRs

NACE does not replace the rules for using ECRs and pECRs. The obligation to process settlement transactions through an ECR/pECR is determined by Law of Ukraine No. 265/95-VR and depends on the nature of the settlement transaction, the type of sale, and statutory exemptions, rather than solely on the KVED or NACE number.

Therefore, a simple technical replacement of a classification code without changing the actual business model does not in itself cancel the current fiscalization rules. However, if an entrepreneur actually launches a new type of trade or service together with a new NACE code, it is necessary to separately check whether the relevant transactions require the use of an ECR/pECR.

Likewise, the transition to NACE itself does not establish new general rules regarding warehouses, retail premises, personnel, delivery, storage, or product labeling. Such requirements depend on the specific goods and activities and are regulated by special legislation.

Do contracts, invoices, and other documents need to be changed

As a general rule, there is no need to re-execute all contracts solely because a KVED code has been recoded into NACE. The activity code itself does not create civil rights or obligations for the parties to a contract.

Documents should be checked when a specific code is explicitly stated in a contract, tender documentation, bank questionnaire, licensing documents, agreements with marketplaces, grant conditions, or other documents where the classification is used as a separate condition. After the information in the USR is changed, the current registration data should be used in such documents.

What a Sole Proprietorship should do before the transition to NACE 2.1-UA

Before the transition, the following checklist should be completed:

• obtain up-to-date information about your KVED codes from the USR;

• if you are a single tax payer, compare them with the activities in the tax register;

• check each code using the official State Statistics Service correspondence table;

• separately analyze codes that have been divided, merged, or changed in meaning;

• online stores should not automatically transfer the old KVED 47.91 but should determine new codes according to product specialization;

• determine the primary and additional activities based on the actual operation of the business;

• check the restrictions for your single tax group;

• for licensed or permit-based activities, check the special requirements;

• after NACE is launched in registration systems, check the current information in the USR;

• after changing the codes, be sure to check the register of single tax payers;

• do not start a new actual activity until it is properly reflected in the tax data;

• keep the USR extract and, if necessary, obtain an up-to-date extract from the register of single tax payers.

For codes with a direct «one-to-one» correspondence, the procedure may be much simpler. Entrepreneurs whose current KVED has been divided among several NACE classes or for whom the very principle of activity classification has changed will require the most attention.

Official sources

1. Order of the State Statistics Service of Ukraine No. 191 dated 28.10.2025 «On Approval of the Classification of Economic Activities (NACE 2.1-UA)» — paragraph 1: NACE 2.1-UA enters into force on January 1, 2027.
   State Statistics Service Order No. 191

2. State Statistics Service of Ukraine — «Classification of Economic Activities NACE 2.1-UA» — official classification and information on the transition.
   NACE 2.1-UA on the State Statistics Service website

3. State Statistics Service — materials on the transition to NACE 2.1-UA and correspondence tables — phased transition procedure, direct and indirect correspondence between codes.
   Transition from KVED-2010 to NACE 2.1-UA

4. Tax Code of Ukraine No. 2755-VI dated 02.12.2010 — Articles 291, 293, 294, 298, 299: simplified taxation system restrictions, 15% rate, deadlines for changing information, register of single tax payers, and grounds for cancellation of registration.
   Tax Code of Ukraine

5. Law of Ukraine No. 755-IV dated 15.05.2003 «On State Registration of Legal Entities, Individual Entrepreneurs and Public Organizations» — state registration and amendments to information about Sole Proprietorships.
   Law of Ukraine No. 755-IV

6. Order of the Ministry of Finance of Ukraine No. 308 dated 16.07.2019 — current application form for the simplified taxation system and documents related to the register of single tax payers.
   Ministry of Finance Order No. 308

7. Law of Ukraine No. 265/95-VR dated 06.07.1995 «On the Use of Registrars of Settlement Transactions in Trade, Catering and Services» — rules for the use of ECRs and pECRs.
   Law of Ukraine No. 265/95-VR

8. State Tax Service of Ukraine — explanation «New NACE 2.1-UA: what will change for Sole Proprietorships and when to transition?» dated 29.07.2026 — parallel use of KVED-2010 and NACE 2.1-UA throughout 2027 and preparation of amendments to the Tax Code.
   State Tax Service explanation on NACE 2.1-UA

9. Diia portal — «Making changes to Sole Proprietorship information» — current procedure for changing activities online and automatically forwarding the single tax payer's application to the State Tax Service.
   Making changes to Sole Proprietorship information in Diia

The Torgsoft help center describes working with company details and pECR registration, business units, and cashiers, but no separate mechanism for changing KVED or NACE in state registers is declared. Therefore, no separate Torgsoft functional module is used for this process.