Why can a sole proprietor receive a fine from the tax authorities in 2024?

Amid various rumors that property may even be confiscated for late payment of tax, failure to file a declaration, or trading without a cash register or a cash register, tax consultant Mykhailo Smokovych decided to remind entrepreneurs that they can be fined heavily.

What tax penalties apply to sole proprietorship in 2024?

1. Failure to file tax returns or late filing — UAH 340.

2. Repeated violation of the deadline for the preparation and submission of tax reports — UAH 1020.

3. Late payment of the single tax (ST) — for entrepreneurs of Group 1 and 2, 50% of the total tax debt, for entrepreneurs of Group 3 — 5% of the total tax.

4. Trade without a cash register or a cash register — 100% of the total value of the products sold; for each subsequent violation — 150% of the total value.

5. No accounting for product balances — 100% of the cost of goods sold.

6. The absence of primary documents is UAH 1020, and for a repeated violation during the current year — UAH 2040.

7. Conducting business activities without hiring employees — up to 10 minimum wages.

8. Carrying out entrepreneurial activities without opening a sole proprietorship — from 17 to 34 thousand UAH.

What are the expenses of a sole proprietorship on the general taxation system?

Article 177 of the TCU specifies a list of expenses related to the receipt of income from entrepreneurial activity, namely:

• expenses for the cost of materials, raw materials, construction materials, fuel and energy, spare parts, etc. required for the manufacture or sale of goods;

• expenses for paying salaries to employees;

• mandatory payments in accordance with applicable law, such as compensation for services, life insurance, etc.;

• expenses for taxes and duties accrued in connection with business activities;

• other expenses: for rent, advertising, communication services, repair, maintenance or operation of property within the enterprise, for the performance of work or production of goods.

A sole proprietor on the general taxation system also has the right to include additional expenses related to business activities and depreciation deductions in this list. 

However, all these expenses must be recorded in the income and expense accounts in a timely manner, otherwise the State Tax Service will appoint an audit for violation of the applicable law. If a violation is confirmed, the tax authorities will impose an administrative fine of UAH 51 to 136 and a tax fine of UAH 1,020, and in case of a repeated violation — UAH 2,040.

Therefore, to avoid violating tax laws and exposing yourself to large fines, keep track of changes in the work of the State Tax Service and submit tax reports in a timely manner.