A Group 2 sole proprietor cannot choose an arbitrary single tax percentage. The rate is set by the village, settlement or city council, depending on the type of activity, and may not exceed 20% of the minimum wage as of 1 January of the reporting year. Below are the rules and amounts for 2026 as of 9 October.
Who can operate in Group 2
Group 2 allows the production and sale of goods, restaurant activities, and the provision of services to single tax payers and the public. The restriction on customers applies to services: goods may also be sold to businesses and sole proprietors on the general tax system.
No more than 10 employees may be in an employment relationship with the entrepreneur at the same time. Employees on maternity leave, childcare leave, or called up for military service during mobilisation are excluded from this count.
The annual income limit is 834 times the minimum wage as of 1 January. In 2026, this is 834 × UAH 8,647 = UAH 7,211,598. To check the limit, use income as defined in Article 292 of the Tax Code, not profit after expenses. This includes, in particular, advances received and the value of goods received free of charge, subject to that article’s rules. Properly documented refunds to customers are accounted for under paragraph 292.11.
Intermediary services involving the purchase, sale, lease and valuation of real estate, providing Internet access, and producing or selling jewellery made from the precious materials specified in paragraph 291.4 are not allowed in Group 2. These activities may qualify for Group 3 if its requirements are met.
Also check all the restrictions in paragraph 291.5. They cover, among other things, security activities, auditing, currency exchange, gambling, certain financial and telecommunications services, and leasing above the specified area limits. Production, import, export and sale of excisable goods are generally prohibited. Exceptions are retail sales of fuel and lubricants in containers of up to 20 litres and retail sales by sole proprietors of beer, cider without added alcohol, perry without added alcohol, and table wine. These exceptions do not waive licensing or transaction-recording requirements.
Payments for goods, work and services must be made in money: in cash or by cashless means, including electronic money. Barter and mutual offset do not comply with paragraph 291.6. The types of activity must be listed in the Register of Single Tax Payers.
How to determine the single tax rate
Under Article 8 of the Law on the State Budget for 2026, the minimum wage is UAH 8,647. The maximum Group 2 single tax is UAH 1,729.40 per month: UAH 8,647 × 20%.
Find the current decision of your local council and check the rate for your actual types of activity and the date it takes effect. If you carry out several types of activity, the highest rate set for any of them applies. If you operate in the territories of more than one local council, the statutory Group 2 maximum of 20% applies, rather than the highest rate among those councils’ decisions. These are the rules in paragraphs 293.6–293.7 of the Tax Code.
Single tax, military levy and USC in 2026
- Single tax: at the council’s rate, up to UAH 1,729.40 per month; due no later than the 20th day of the current month, inclusive.
- Military levy: 10% of the minimum wage as of 1 January, or UAH 864.70 per month; due no later than the 20th day of the current month, inclusive.
- USC for yourself: if you are required to pay the contribution, at least 22% of the minimum wage, or UAH 1,902.34 per month. USC for the quarter must be paid before the 20th day of the month following the quarter.
As a general rule, the single tax and military levy are payable even for months with no income. Having no income does not, by itself, exempt a sole proprietor on the simplified tax system from USC either.
At the maximum single tax rate, with minimum USC and no exemptions, the total for one month in 2026 is UAH 1,729.40 + UAH 864.70 + UAH 1,902.34 = UAH 4,496.44. This is the total of payments for yourself; it excludes taxes on employee wages and other obligations that may arise from your particular activity or property. USC is shown here as a monthly amount, although its payment deadline is quarterly.
When exemptions apply
Leave and illness. A Group 2 sole proprietor with no hired employees is exempt from the single tax and military levy for one calendar month per year while on leave, and also for an illness lasting 30 or more calendar days. Submit an application in free form; for illness, attach an extract from the Electronic Register of Sick Leave Certificates. This relief does not exempt you from USC for yourself.
Areas of hostilities and occupation. Group 1 and Group 2 sole proprietors whose tax address was in the relevant area as of the date hostilities began or temporary occupation commenced are entitled not to pay the single tax and military levy. The period is determined by the official List of Territories: from the first day of the month in which hostilities began, the possibility of hostilities arose, or occupation commenced, through the last day of the month in which the relevant status ended. After the state registration of a change of location to another area, the exemption ends on the first day of the following month. During periods when this relief is used, the corresponding advance contributions are not assessed; the single tax and military levy amounts for those periods are left blank in the return under paragraph 11 of Subsection 8 and subparagraph 1.12 of paragraph 16¹ of Subsection 10, Section XX of the Tax Code. This is not a general USC exemption.
Military service. Exemption from assessment and payment of, and reporting on, the single tax and military levy for oneself applies to sole proprietors called up during mobilisation, assigned to perform mobilisation duties in wartime staffing positions, or accepted into military service under contract. The sole proprietor must have been registered before the relevant call-up or contract. The exemption covers the period from the first day of the month of call-up or contract signing, but no earlier than 24 February 2022, through the last day of the month of demobilisation or discharge from service. Having employees or receiving business income does not cancel this tax relief. The State Tax Service applies it using data from the Register of Conscripts, Persons Liable for Military Service and Reservists. If the information is missing or the State Tax Service has not received it, submit an application to the tax authority with a copy of your military ID or another government-issued document showing call-up during mobilisation, or a copy of your contract. The procedure is confirmed in the State Tax Service guidance dated 1 October 2026.
USC has separate rules: the exemption from obligations during military service under paragraph 9² of Section VIII of Law No. 2464 applies to payers who are not employers. A sole proprietor with employees may be exempt from USC for themselves under part six of Article 4 if another employer, including a military unit, paid at least the minimum insurance contribution for them for the relevant month. Obligations concerning employees must be fulfilled under separate rules. This is explained in the State Tax Service guidance on USC for mobilised employers.
Other exemptions from USC for yourself. Part four of Article 4 of Law No. 2464 provides an exemption for recipients of an old-age or service pension, persons with disabilities, and persons who have reached the age specified in Article 26 of the pension law and receive a pension or social assistance. Under part six of Article 4, an exemption also applies for months in which an employer paid at least the minimum insurance contribution for the sole proprietor. Check the amount paid for each month.
The general wartime right not to pay USC for yourself under paragraph 9¹⁹ of Section VIII of Law No. 2464 is suspended in 2026 by paragraph 3 of the Final Provisions of Law No. 4695-IX. Therefore, martial law alone is not a basis for non-payment. This is confirmed by the State Tax Service guidance on USC in 2026.
Records and tax return
A Group 2 sole proprietor keeps records in any form, showing income received by month. Keep documents supporting the figures in your records and tax return.
Under ordinary conditions, the single tax payer return must be filed within 60 calendar days after the last day of the reporting year. It shows income and advance contributions for the single tax and military levy. If you are required to report USC, submit Appendix 1 with information on the contribution accrued. The State Tax Service confirms the filing deadline and reporting contents in its guidance dated 4 June 2026.
If you exceed the income limit, move to Group 3 or opt out of the simplified system, quarterly filing deadlines under paragraph 296.5.1 apply: file the return within 40 calendar days after the end of the quarter. Filing this return removes the requirement to file another return under the annual deadline. Use the current form under Ministry of Finance Order No. 578, as amended by Order No. 57; current electronic forms are listed in the State Tax Service register of reporting documents.
Exceeding the limit and breaching the conditions
A 15% single tax applies to the amount by which the annual income limit is exceeded. From the next quarter, you must move to Group 3 if you meet its requirements, or to the general system. Submit the application no later than the 20th day of the month following the quarter in which you exceeded the limit. Pay tax on the excess within 10 calendar days after the deadline for the quarterly return.
The 15% rate also applies to income from activities not listed in the Group 2 Single Tax Payer Register, non-monetary settlements, activities prohibited under the simplified system, and activities that do not meet Group 2 conditions. Paying 15% does not allow you to continue the breach. The mandatory move to the general system and its effective date are determined under the applicable subparagraph of paragraph 298.2.3. For activities not permitted in Group 2, the move takes effect on the first day of the month following the quarter in which the breach occurred. For other grounds, paragraph 298.2.3 sets deadlines following the relevant reporting period. If the State Tax Service identifies a breach during an audit, paragraph 299.11 also applies.
If you plan in advance to provide services to customers on the general system or increase the number of employees, complete an eligible move to another group before starting that work. To change groups voluntarily, submit the application no later than 15 calendar days before the start of the next quarter.
Tax debt and penalties
For non-payment or partial payment of a Group 2 single tax advance contribution, Article 122 provides for a penalty of 50% of the applicable rate: at the maximum 2026 rate, UAH 864.70. For a similar breach concerning the military levy, the penalty is 50% of the monthly levy, or UAH 432.35. Late-payment interest is subject to Article 129; the rule that it starts from the 91st day applies to liabilities determined by the payer and is not universal for all assessments.
For non-payment or late payment of USC, the general sanctions under Article 25 of Law No. 2464 are a penalty of 20% of the amount not paid on time and late-payment interest of 0.1% of the underpayment for each day of delay. The application of sanctions is assessed in light of legal exemptions and the specific period of the breach.
Tax debt exceeding UAH 3,060 on the first day of each month for two consecutive quarters triggers an obligation to move to the general system on the last day of the second quarter. A separate ground applies to a payer who independently determined a positive difference for the last reporting year between the total minimum tax liability and the amount of taxes, levies, payments and land lease expenses paid: single tax debt, regardless of amount, on the first day of each month for two consecutive quarters. The move to the general system must take place on the last day of the second of those quarters. The threshold and conditions are explained in the State Tax Service guidance on cancellation of registration due to tax debt. Check assessments and payment credits in the Electronic Cabinet.
When an RRO or PRRO is required
Group 2 does not have a general exemption from RRO/PRRO. As a general rule, cash payments and card payments, including through acquiring, must be processed through a registered RRO/PRRO and accompanied by a fiscal receipt.
A direct bank transfer from the buyer’s account to the seller’s current account using IBAN details, without acquiring, does not require an RRO/PRRO. The fact that funds are credited to an account does not mean that a card payment has become such a transfer. The difference is described in the State Tax Service guide to internet banking.
Article 9 of Law No. 265 contains separate exceptions. In particular, paragraph 14 covers services paid for exclusively through remote banking systems and/or money transfer services. Cases under Article 10 may require a settlement book and a book of settlement transactions. Check the specific exception and all its conditions before starting to accept payments.
What entrepreneurs should check
- Compare your actual activities, service customers, number of employees and income against Group 2 requirements.
- Check your activity types in the Single Tax Payer Register and the current rate set by your local council.
- Determine whether you have a documented exemption separately for the single tax, military levy and USC.
- Obtain current payment details from the State Tax Service or Electronic Cabinet and pay each liability to the correct account.
- Keep monthly income records, monitor the annual limit and check that payments have been credited.
- Choose how to apply RRO/PRRO based on the payment methods you accept, and file the return with the required appendices by the applicable deadline.
Key legislation: Tax Code of Ukraine, Law No. 2464 on USC, Law on the State Budget for 2026, and Law No. 265 on RRO.
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