Entrepreneurs on a single tax: refund for goods

If an entrepreneur on the single tax returns money to the buyer for goods (services or works), such an operation must be recorded not only in the income ledger but also in accounting records.

What will be the tax consequences for the business if this is not done?

When must money be refunded for goods?

According to part 5 of clause 292.11 of the Tax Code, income does not include funds returned by an entrepreneur — a single taxpayer — to the buyer due to:

• receiving a corresponding request from the consumer for a refund;

• return of goods (both of proper and improper quality);

• termination of the contract with the seller.

If the buyer contacts the store on the above grounds, the seller (cashier) must process the refund for the goods.

Thus, the consumer can return goods of proper quality, for example, if they do not fit in size or functionality. The only requirement — the product must show no signs of use, be in proper condition, and be returned with a receipt. Goods can be returned within 14 days.

Goods of improper quality are also subject to return. For example, in cases when the buyer finds defects. It is important to have a payment document (receipt), which confirms the purchase.

Refund procedure for single taxpayers

Sole Proprietorships and legal entities on the single tax must follow a certain procedure for refunds, in particular:

How to prepare a refund request for overpayment?

1. The entrepreneur fills out a request and submits it to the tax office at the location of the point of sale. The document must specify:

• the type of tax and the overpaid amount;

• the date of payment received for the goods and details of the fiscal receipt;

• the method of refund, for example to the taxpayer’s current account.

2. Refund in case of erroneous payment. The following deadlines are set for this operation:

• For Sole Proprietorships on the single tax — within the period of receipt of funds.

• For legal entities on the single tax — within 3 working days from the date of receipt of such funds.

If the established refund deadlines are not met, the tax authority may include them in the entrepreneur’s income and charge tax on that amount.

If the overpayment arose as a result of filing an amended declaration, it is not necessary to provide the tax authority with a payment order confirming the receipt. In this case, it is enough to attach a letter explaining the reasons for the overpayment to the request.

It is important to remember that in any case there must be confirmation of the grounds for the refund. Without a consumer’s request or termination of the contract, the entrepreneur has no right to adjust income.

3. Pay attention to the reporting period

It matters when exactly the refund is made: within one or different reporting periods. Sometimes an entrepreneur includes income from a sale in one period but processes the refund in another.

Therefore, if funds were received and refunded within one reporting period (with a request or contract termination), such an amount will not be included in income. The single taxpayer may omit it from the declaration.

But if such transactions occurred in different tax periods, the entrepreneur includes the amount in income in the reporting period of receipt, and in the next period, when the refund occurs, makes an adjustment.

The tax authority clarifies that to adjust income, an amended declaration with appropriate corrections must be submitted.

Note that if the seller received payment in foreign currency, income is recalculated at the NBU exchange rate according to clause 292.5 of the Tax Code.

Documentation for refunds to the buyer

The seller must issue the following documents:

• an expense receipt through the ECR;

• an act of issuing funds.

Each refund by an entrepreneur on the single tax must be processed only through the Electronic Cash Register.

How long to keep refund documents?

The fiscal receipt and the act of issuing funds to the consumer must be kept for 3 years. During an audit, the tax authority has the right to request these documents. Therefore, Sole Proprietorships or legal entities on the single tax must provide them for verification.

Common mistakes of Sole Proprietorships when processing refunds

Let’s consider the most common mistakes when processing refunds of goods and money:

1. No act was prepared when refunding more than 100 UAH.

Consequences: income will not be reduced by the refund amount, which means the Sole Proprietorship on the single tax must pay the full tax from total sales. Refunds will not be counted.

2. Incomplete data in the refund act.

3. Failure to meet the retention period for fiscal documents confirming refunds to consumers.

In this case, the entrepreneur cannot confirm the legality of the operation performed.

4. Incorrect fiscalization of the refund operation.

Consequences: the tax authority may impose a fine for incorrect use of the ECR. From August 1, 2025, the grace period ends for some entrepreneurs, in particular for Sole Proprietorships on the single tax who are not VAT payers and do not sell excise goods. Therefore, even minor errors in fiscal receipts may have serious consequences. 

The tax authority clarifies that for incorrect use of the cash register, fines will again be collected in full:

• for the first violation — 100% of the value of goods;

• for repeated violation — 150%.

To avoid financial sanctions from the tax authority, follow the established rules of settlements in trade and monitor current legislative changes.

Frequently Asked Questions

How to process a refund if the amount is less than 100 UAH?

Issue an expense receipt using form No. FKCH-2 through the ECR. There is no need to prepare an act of issuing funds.

How can a buyer’s refund request be submitted?

The entrepreneur may accept a refund request either in person or through any communication channel, such as Viber.

What to do in case of an erroneous transaction through the ECR?

First, the transaction must be canceled through the cash register, and then an Act of cancellation of the erroneous payment must be prepared. The document must include the fiscal receipt details and all transaction data.