Group 1-2 FOP Vacation: How to Avoid Taxes

Single Tax FOP Vacation: When You Can Skip Paying the Single Tax and What to Consider

An individual entrepreneur (FOP) does not go on vacation in the traditional labor sense like a hired employee. However, the Tax Code gives FOPs in the first and second groups a specific right, once a year, not to pay the single tax for one calendar month of vacation. As of 2025, this exact rule also applies to the military tax for such FOPs. To exercise this right, you must meet the Code's conditions and properly submit an application to the tax authority. (Law of Ukraine)

Who Can Use This Exemption

The right to exemption belongs exclusively to an FOP — a single tax payer of the first or second group who does not use the labor of hired employees. For this specific category, the Code provides an exemption from paying the single tax during a vacation of one calendar month per year. There is no such special rule for the third group. (rv.tax.gov.ua)

Which Payments Does the Vacation Cover

During such a month, a first or second group FOP may skip paying the following:

Both payments for the first and second groups are paid in advance monthly, no later than the 20th of the current month. That is why properly processing the vacation makes practical sense: it exempts you from the next regular monthly payment. (rv.tax.gov.ua)

Which Payments the Vacation Does Not Cover

The vacation does not provide an automatic exemption from the Unified Social Contribution (ESV) for oneself. For FOPs on the simplified system, the general rule is: ESV is determined by the entrepreneur but cannot be less than the minimum insurance premium, unless there is a special legal exemption. (Law of Ukraine)

Those who may skip paying the ESV for themselves include, in particular:

It is also important to consider the current wartime period: the provision that previously allowed FOPs not to pay the ESV for themselves during martial law has been suspended in 2026 by the State Budget Law. Therefore, you must focus on the general rules of Law No. 2464-VI and the special exemptions directly provided within it. (Law of Ukraine)

What Conditions Must Be Met

To avoid paying the single tax and military tax for a vacation month, the following conditions must be met simultaneously:

The Code's phrase “one calendar month per year” means the exemption cannot be divided into parts. A safe practical approach is to register the vacation for a full calendar month, not an arbitrary 30 days. (rv.tax.gov.ua)

Why the Lack of Income is Crucial

For a single tax payer, the date of receiving income is the date funds are received in cash or non-cash form. Therefore, for a vacation, it is important not only to “not work” but also not to receive payment in that month. If money hits the entrepreneurial account or is received in cash during the vacation month, it is already income for tax purposes. (zp.tax.gov.ua)

That is why during the vacation month, you must control not only sales but also actual cash receipts. If a client paid for a service or product during this month, even for previously completed work, the right to the exemption for that month is lost. (km.tax.gov.ua)

What Happens if Income is Still Received

If a first or second group FOP received business income during the declared vacation, this income must be reflected in accounting and in the declaration, and the single tax paid as usual. Meanwhile, the mere receipt of income in such a month does not mean an automatic loss of the single tax payer status. Meaning, the consequence here is not “annulment of the simplified system,” but the loss of the right to the tax exemption for the respective month. (od.tax.gov.ua)

How to Submit an Application

There is no separate approved application form for the vacation. The Tax Code stipulates that information about the annual vacation period is submitted via a free-form application to the supervisory authority. For an illness, a similar application is filed, strictly accompanied by an extract from the Electronic Register of Incapacity Sheets. (Zir Tax)

The Code does not establish a separate special deadline for submitting the application. At the same time, the STS explicitly states in its clarifications: in order not to violate the deadlines for paying advance contributions, the application for the annual vacation period should be submitted before the start date of the vacation. (Zir Tax)

If the Single Tax is Already Paid in Advance

If the FOP paid the single tax in advance, the amount paid for the “vacation” month does not disappear. The Tax Code explicitly provides that such amounts, upon the payer's application, are credited toward future single tax payments. (Zir Tax)

Illness Instead of Vacation

Aside from a vacation, a first or second group FOP without hired employees has the right to the exact same exemption for a period of illness, provided it lasts 30 or more calendar days. Proof is an extract from the Electronic Register of Incapacity Sheets. This also requires a free-form application. The STS recommends submitting it by the 20th of the month following the month in which the sick leave ended. (rv.tax.gov.ua)

Practical Situation

Conclusion

The FOP tax vacation is not a general “business pause,” but a narrow right for first and second group FOPs without hired employees to skip one monthly advance payment of the single tax and military tax. Key conditions — one calendar month per year, no income in that month, and a timely submitted application. Such a vacation generally does not cancel the ESV for oneself. (rv.tax.gov.ua)

Official Sources

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