Sole Proprietor Source Documents: How to Document Goods and Keep Inventory Records

In Ukraine, an individual entrepreneur (sole proprietor) must retain documents that substantiate the figures in their tax records. If the entrepreneur is required to keep inventory records, goods received must be documented with source documents and entered in the Inventory Records Form under the Procedure approved by Order No. 496 of the Ministry of Finance of Ukraine dated 03.09.2021 before sales begin. An entry in warehouse software does not, by itself, substantiate the purchase of goods.

Determine your obligations as a sole proprietor based on your tax system, product range, and payment methods. Assign delivery acceptance, recordkeeping, and document access to specific employees. For ordinary sole proprietor documents, the Tax Code sets a minimum retention period of 1,095 days. Before destroying an archive, however, account for the document category, when the period starts, any suspension of deadlines, and any unfinished audits or disputes. If no documentary audit has taken place, also take account of the tax authority’s position that documents should be retained longer.

What records your store needs

Distinguish between three tasks in store operations. Management inventory records help the owner track quantities, values, and movements between stores. Tax records are used to determine income, expenses, and taxes. Mandatory inventory accounting under Procedure No. 496 requires a special Form and source documents supporting its entries. A report showing warehouse stock balances does not replace this Form.

Article 2 of Law No. 996-XIV, “On Accounting and Financial Reporting in Ukraine” specifies the entities to which it applies, including legal entities and other entities expressly named in the Law. Sole proprietors determine their own obligations under the Tax Code of Ukraine, the rules for their tax system, and Procedure No. 496 if they are required to keep inventory records.

• A sole proprietor on the general tax system keeps income and expense records under paragraph 177.10 of the Tax Code and must have supporting documents showing the origin of goods. Expenses not supported by documents are excluded from deductible expenses under subparagraph 177.4.5.
• Single tax payers in groups 1 and 2, and group 3 payers who are not value added tax (VAT) payers record the income they receive on a monthly basis, in any form, under paragraph 296.1.
• Group 3 single tax payers who are VAT payers keep income and expense records using the standard form and the applicable procedure.

Paragraph 44.1 of the Tax Code of Ukraine No. 2755-VI prohibits preparing tax reporting figures from data that is not supported by proper documents. Exemption from mandatory inventory accounting does not cancel the requirement to document tax reporting figures.

Who must keep inventory records

Determine whether you have this obligation under paragraph 12 of Article 3 of Law No. 265/95-VR on the use of settlement transaction registrars. It requires entities carrying out settlement transactions to account for inventory and sell only goods reflected in their records. Settlement transactions include, in particular, accepting cash and card payments. Accepting card payments does not, by itself, exempt you from this requirement.

An exception applies to sole proprietors who are single tax payers and are not VAT payers. The exception does not apply to entrepreneurs who sell:

• technically complex household goods subject to warranty repair;
• medicinal products and medical devices;
• jewelry and household items made of precious metals, precious stones, precious stones of organic origin, or semiprecious stones.

Before adding equipment to your product range, compare its name and code under the Ukrainian Classification of Goods for Foreign Economic Activity (UKT ZED) with the List of groups of technically complex household goods approved by Resolution No. 231 of the Cabinet of Ministers of Ukraine dated 16.03.2017. It names, among other things, refrigerators, washing machines, laptops, smartphones, and certain power tools. Ask the supplier for the data needed to classify the specific model: the word “electronics” or the existence of a warranty is not enough.

Paragraph 12 frames the exception in terms of the entrepreneur and their activity. If a special category of goods means the exception does not apply to you, organize inventory records for all of the sole proprietor’s goods, including where the range is mixed. Separately determine whether a settlement transaction registrar (STR) or a software settlement transaction registrar (software STR) is required for each payment: cash register use and keeping the inventory Form are governed by different requirements.

Which documents to obtain for goods

Paragraph 2 of Section I of Procedure No. 496 lists delivery notes, transport documents, customs declarations, purchase records, fiscal receipts and non-fiscal sales receipts, and other documents with the required details. When accepting a delivery, establish which transaction the document supports and whether it identifies the parties, goods, quantity, and value.

A tax agent is a person who calculates, withholds, and pays taxes on another individual’s taxable income. When purchasing from a private individual, the accountant must determine the tax rules applicable to that person’s income before paying the seller.

If you purchase imported goods from a supplier in Ukraine, document your own purchase transaction with that supplier. Another importer’s customs declaration does not, by itself, prove that the goods were transferred to your sole proprietorship.

Why an invoice or bank payment may not be enough

An invoice that merely requests payment for a future delivery does not record that the goods were actually received. A payment instruction and bank statement can help substantiate the payment, but may not establish exactly what the store received or in what quantity. Retain payment documents with the delivery document and link them by invoice, contract, or delivery number.

A services acceptance certificate substantiates the relevant service. For example, a carrier’s certificate may substantiate transportation, but it does not replace the document for the purchase of a batch of goods. Assess a transport document by its contents as well: if it lacks the details required for inventory accounting, obtain a delivery note or another document with complete information.

A fiscal receipt or non-fiscal sales receipt may serve as a source document under Procedure No. 496 if it contains the required information. If the receipt does not identify the recipient or describe the goods sufficiently, ask the seller to prepare a document that identifies your purchase.

What document details to check

For accounting under Procedure No. 496, a document must make it possible to identify the supplier and recipient, transaction date, goods, quantity, and value. Check the legal entity’s name or the entrepreneur’s name and the relevant identification number: the taxpayer registration number (TRN) or the code under the Unified State Register of Enterprises and Organizations of Ukraine (EDRPOU). For individuals who refused a TRN on religious grounds, officially notified the tax authority, and have the relevant passport notation, the Procedure provides for the passport series and number or identity card number.

Use this checklist when accepting deliveries:

• document title, date prepared, and number, if any;
• correct details for the seller and your sole proprietorship as recipient;
• transaction description: receipt, return, transfer, or other disposal;
• clear goods descriptions, units of measure, quantity, price, and total value;
• details of responsible persons and signatures or electronic particulars as required for the specific document.

Article 9 of Law No. 996-XIV establishes the mandatory details of source documents for legal entities, while Regulation No. 88 also governs documentation. These details include the document name, date, enterprise name, transaction description and scope, unit of measure, positions and surnames of responsible persons, and a signature or other information that identifies the transaction participant. For a sole proprietor’s inventory accounting, also follow the separate requirements of Procedure No. 496.

To make deliveries easier for employees to accept and record, agree with suppliers that documents will be prepared in Ukrainian. For enterprises covered by Regulation No. 88, paragraph 1.4 expressly requires documents in Ukrainian and properly prepared translations faithful to the originals of documents prepared in a foreign language.

How to accept a delivery: store employee procedure

The owner can assign delivery acceptance to a merchandiser or salesperson, and recordkeeping to themselves or an accountant. Determine who will replace the responsible employee so that goods are not put up for sale before documentation is complete.

1. Receive the document with the delivery. Compare it with the order and ensure that it names the correct entrepreneur as recipient.
2. Count the goods. Check models, sizes, units of measure, quantities, and packaging condition. Do not confirm receipt of a quantity that is not actually there.
3. Resolve discrepancies. Agree with the supplier how to document a shortage, replacement, or damage. The agreed details must match in both parties’ documents.
4. Compare amounts. Check that quantity multiplied by price matches each line value and the document total; separately check the amount paid and the unpaid balance.
5. Record the goods received. If you keep the Form under Procedure No. 496, enter the document before the goods are sold.
6. Ensure the documents are available at the point of sale. The salesperson should know where to find the Form and delivery document, including when the owner is away from the store.

Illustrative example. A delivery note lists 20 units at UAH 150 each, for a total of UAH 3,000. The employee receives 18 units. At that price, the value of the goods actually received is UAH 2,700, a difference of UAH 300. The parties document how they resolve the discrepancy, after which the responsible person enters the actual delivery details in the records.

How to complete the Inventory Records Form

Section II of Procedure No. 496 allows the Form to be kept on paper or electronically. For the electronic version, the entrepreneur chooses the software format and method of data entry but must follow the prescribed structure and recording rules. Source documents are mandatory attachments to the Form.

Enter the entrepreneur’s surname, first name, and patronymic, if any; TRN or passport details provided for by the Procedure; tax address; and the name and address of the point of sale or storage for which the records are kept. On a paper Form, put this information on the title page and write entries legibly in dark ink or with a ballpoint pen.

First entry: balance on the date the obligation arises

If goods are already in stock on the date the obligation arises, the sole proprietor prepares an opening inventory in any form. It lists descriptions, quantities with units of measure, and values determined independently. This inventory is the basis for the first entry. If there is no stock, do not enter an opening balance.

For the first entry, put “1” in column 1, the entry date in column 2, “Опис залишку товарів на початок обліку” (Inventory of goods at the start of recordkeeping) in column 3, the inventory date in column 4, “1” in column 5, and the total inventory value in column 7. Leave columns 6, 8, and 9 blank. The inventory covers stock on the date the obligation arises; for subsequent purchases, obtain documents for the actual purchase.

Subsequent entries: receipts and disposals

Enter transactions in chronological order. In columns 1–2, enter the row number and date; in columns 3–6, enter the type, date, number of the source document if any, and details of the supplier or recipient. In column 7, enter the total value of goods received according to the document; in column 8, the value of the relevant disposal; in column 9, notes provided for by the Procedure.

Do not enter sales made through an STR or software STR in column 8. Column 8 records sales made by cashless payment and lawfully processed without an STR or software STR; internal transfers; returns to suppliers; destruction; loss; and use for the proprietor’s own needs. Before recording a sale, the accountant must establish how it was processed: a “cashless payment” label is not enough.

Illustrative example. A store receives a batch under a delivery note for UAH 6,000; enter this amount in column 7. Later, part of the goods is returned to the supplier under a document for UAH 1,200; enter this amount in column 8. Do not duplicate the sale of another part of the batch through a software STR as a separate entry in column 8. Therefore, the difference between the totals of columns 7 and 8 does not, by itself, show the store’s actual stock balance.

Do not erase an incorrect row. To void it, enter “анульовано” (voided) in the notes. To correct it, mark the old row “анульовано — виправлено” (voided — corrected) and give the new row number; in the new row, enter “виправлено” (corrected) and give the old row number. This makes it possible to trace what changed and in which row.

What to do if the supplier did not provide documents

Ask the supplier for a document for the actual delivery or for corrected details. Until the issue is resolved, keep the batch separate from goods cleared for sale. For an entrepreneur subject to mandatory inventory accounting, paragraph 9 of Section II of Procedure No. 496 prohibits sales if source documents are missing, if the corresponding entries in the Form are missing, or if both are missing.

Do not invent a purchase, change the actual transaction date, or name a different supplier. An internal document confirming the presence of goods does not recreate the circumstances of their purchase. The rule in Regulation No. 88 about an enterprise preparing an internal report when a counterparty’s document is missing does not give sole proprietors general permission to replace a supplier’s document with their own report.

How to restore lost documents

If proper documents existed but were lost, damaged, or destroyed ahead of time, establish the cause. The general procedure is set out in paragraph 44.5 of the Tax Code. Entrepreneurs who operated in active hostilities areas or temporarily occupied territories of Ukraine and cannot produce documents because of circumstances connected with hostilities are subject to the special procedure under subparagraph 69.28, described below.

General procedure under paragraph 44.5

1. Record the event and list the documents. Gather documents prepared in accordance with the law that substantiate the event causing the loss, damage, or early destruction.
2. Notify the tax authority within five days of the event. Submit a written notice to the tax authority where you are registered, following the procedure for filing tax returns, together with documents substantiating the event. If the documents relate to relevant customs clearance, authorization, or a permit for special simplifications, including transit simplifications, also notify within the same period the customs authority that cleared the declaration or granted the authorization or permit.
3. Restore the documents within 90 calendar days. The period starts on the day after the notice is received by the controlling authority. Request copies or duplicates from suppliers, restore electronic originals from archives, and obtain bank and customs documents through the proper procedure.
4. Keep evidence of the steps taken. Retain confirmation that the notice was filed and that the restored documents were received.

If the notice and supporting documents are submitted in the prescribed manner and time, and the loss makes an audit impossible, paragraph 44.5 provides for postponing the audit until the documents are restored and provided under that paragraph, but for no more than 120 days. This rule does not apply to audits specified in Article 200 of the Tax Code and does not extend the 90-day period for restoring documents.

If the documents are not restored, or are lost, damaged, or destroyed early again after the right to restore them has been used, they are deemed missing at the relevant time when reports are prepared or other legal requirements are fulfilled.

Special procedure if documents were affected by hostilities

Subparagraph 69.28 of paragraph 69 of subsection 10 of Section XX of the Tax Code establishes an exception to Article 44 for taxpayers and tax agents who operated in active hostilities areas or temporarily occupied territories of Ukraine and cannot produce source documents to support tax reporting figures. Loss of documents unrelated to hostilities in the relevant territories does not qualify for this procedure.

The grounds may include loss, destruction, or damage of documents, or their presence in the relevant territory where they cannot be removed. The provision also covers cases where removal would threaten people’s life or health, or is impossible because of administrative obstacles imposed by government authorities. The owner and accountant should compare the place of business, place where documents are stored, and circumstances preventing access to the conditions in subparagraph 69.28 and the official List of Territories under Order No. 376.

1. Prepare a notice in any form. Describe the circumstances of the loss or inability to remove documents, the tax reporting periods, and a general list of source documents, with their details where possible. Subparagraph 69.28 calls this a notice of inability to remove source documents and also provides for filing it in the event of loss. For an enterprise, the provision expressly requires signatures of the director and chief accountant; a sole proprietor files the notice in their own name as a taxpayer.
2. Submit the notice to the controlling authority and retain proof. Separately keep available documents and information about the circumstances that caused the loss or prevent removal.
3. Report any subsequent loss. If it was initially impossible to remove the documents and their loss becomes known after the notice is filed, submit a notice of loss describing the circumstances.
4. Monitor the tax authority’s response. If the authority refuses to apply the special procedure, it must issue a reasoned decision stating the grounds and evidence for refusal no later than one month after receiving the notice. The decision may be challenged through administrative or court proceedings.

If the conditions of the special procedure are met, reporting figures for periods named in the notice cannot be questioned solely because source documents are missing. The notice is also grounds for retaining the expenses and tax figures provided for by the rule, including a VAT credit and a negative VAT balance, where applicable to the taxpayer.

After a notice that documents cannot be removed because they are in the relevant territories has been filed, a moratorium applies to documentary audits of the named periods. Taxpayers who reported a loss under subparagraph 69.28 are not subject to audits concerning the periods named in the notice, including after martial law ends. Until a final decision is made in a case challenging a refusal, the tax authority cannot question the reporting figures or initiate any audit of those periods.

For periods covered by the notice, subparagraph 69.28 prohibits increasing declared tax liabilities, the negative value of the corporate income tax base, or the claimed VAT budget refund. Before filing amended returns, the accountant must take these restrictions into account. The controlling authority bears the burden of proving that the grounds for the special procedure are absent, but its unjustified application entails liability.

The special procedure concerns substantiation of tax reporting. For current deliveries, continue to obtain source documents and comply with the inventory accounting requirements under Procedure No. 496.

How to retain documents for several stores

A sole proprietor with several points of sale must also keep inventory records for each separate location. If goods are delivered to a warehouse and then sent to a store, document the transfer and make the corresponding entries. The supplier’s document and transfer document must make it possible to trace the goods to the specific location.

Keep the Form and goods documents at the point of sale until the last unit listed in the relevant document has been disposed of. Each month, group documents chronologically according to the Form entries and retain them with the Form. For easy retrieval, name files with the date, number, and supplier, and arrange paper copies in the same order.

At the start of an audit, you must provide documents substantiating the inventory records and origin of goods on hand. Under Procedure No. 496, these may be provided by the sole proprietor or an employee who actually sells the goods or handles payments. If originals are not at the location, copies may be provided, with originals presented by the end of the audit if necessary. An electronic Form must be opened in a view suitable for viewing and/or copying.

To check whether the store is ready, ask the salesperson to find the document for a randomly selected item, the corresponding Form entry, and the transfer document if the goods arrived from another warehouse. For an electronic archive, check whether the salesperson can access it from their workstation and whether a backup exists. A scan of a paper document is convenient to use as a copy; retain the paper original as well.

How long sole proprietors must retain documents

Under subparagraph 44.3.3 of the Tax Code, the minimum period for ordinary sole proprietor documents that do not belong to special categories is 1,095 days. For documents used in tax or other reporting provided for by the Code, the period starts on the day the report is filed, or, if it is not filed, on the filing deadline. For documents relating to compliance with other legislation monitored by the tax authorities, the period runs from the relevant transaction; for permits, it runs from the end of their validity.

The 1,825-day period in subparagraph 44.3.2 applies to the taxpayer and document categories specified there; it does not establish the same period for every sole proprietor. Subparagraph 44.3.1 provides for 2,555 days for documents and information needed for control under Article 39 on transfer pricing, Article 39-2 on controlled foreign companies, and paragraph 141.4 on taxation of nonresident income. If a sole proprietor carries out relevant transactions, the accountant must separately identify the category of related documents.

When the retention period is extended

Paragraph 44.3 expressly extends retention for periods when the limitation period is suspended in cases under paragraph 102.3. The limitation period determines the time during which the tax authority may carry out the relevant control and assess a monetary liability. Before reviewing the archive, determine whether any of the following circumstances applied:

• Continuous presence outside Ukraine for 183 days or more. Subparagraph 102.3.1 covers the relevant continuous period.
• A statutory or court prohibition on conducting an audit. Under subparagraph 102.3.2, account for the period when the prohibition applied to an audit of the taxpayer.
• Suspension, extension, or postponement of an audit. Subparagraph 102.3.3 concerns procedures under Articles 44, 82, and 85 of the Tax Code or the Customs Code of Ukraine.
• Inability to conduct an audit under subparagraph 102.3.4. This concerns the relevant report, denial of access to tax officials where they have complied with lawful access requirements, or a court challenge to the decision to conduct an audit. For the report and the challenged decision, exceptions apply where the actions are found unlawful or the decision is found unlawful or cancelled.
• Administrative or court challenge to an assessed monetary liability. Subparagraph 102.3.5 suspends the period while the challenge is pending.

Under paragraph 44.4, documents related to an audit, administrative appeal, or court proceedings must be retained until the relevant audit, periods for challenging its decisions, and/or court case have ended, but at least for the periods in paragraph 44.3. Keep these documents separate from the rest of the archive so they are not destroyed along with a folder for the relevant year.

How to account for quarantine and wartime rules

For an archive affected by temporary rules from 2020–2023, the owner or accountant should separately consider document retention periods and tax procedure deadlines. Paragraph 52-2 of subsection 10 of Section XX suspended limitation periods under Article 102 starting on 18 March 2020. From 17 March 2022, the operation of paragraph 52-2 was suspended for the period of martial law or a state of emergency. Quarantine ended at the end of 30 June 2023 under Resolution No. 651 of the Cabinet of Ministers of Ukraine.

For document retention, account for the general suspension of deadlines under subparagraph 69.9 from 7 March 2022 through 31 July 2023: document retention was not among the listed exceptions. For the quarantine period, separately establish whether a statutory audit ban applied to your sole proprietorship: paragraph 44.3 links extended retention to the grounds in paragraph 102.3, including an audit prohibition. Apply the rules in force for each period, and count overlapping applicable days only once.

If the archive concerns an audit or dispute, establish the rules for that specific procedure. From 7 March 2022, subparagraph 69.9 contained no list of exceptions; from 17 March, paragraph 102.9 on suspension of deadlines also applied. Its wording changed from 5 April 2022, and from 27 May 2022 it expressly provided for exceptions under the Code. At the same time, subparagraph 69.9 established exceptions, including for reporting, tax payments, and specified audits and actions based on their results.

The list of exceptions changed from 25 November 2022, and from 3 January 2023 an exception was added for deadlines to appeal refusals to register tax invoices and adjustment calculations. From 1 August 2023, the general suspension under subparagraph 69.9 ended and paragraph 102.9 was excluded. The resumption of a deadline for a particular procedure does not, by itself, determine when document retention ends.

How to determine the special extension under subparagraph 69.36

Subparagraph 69.36 of paragraph 69 of subsection 10 of Section XX extends retention of documents and information under paragraph 44.1 for periods when limitation periods are suspended for scheduled and unscheduled documentary audits that are not conducted because of restrictions under subparagraphs 69.2-2, 69.35-1, and 69.35-2. To apply this rule to your archive, the accountant must establish the audit type, the ground on which it was not conducted, and the boundaries of the relevant period.

• Safe conditions under subparagraph 69.2-2. An audit requires safe access to premises and property, safe access to documents, and the ability to conduct an inventory safely. An audit already underway is suspended by order, in the circumstances provided for in this subparagraph, until the obstacles are removed. The rule also takes into account a notice under subparagraph 69.28. At the same time, documentary audits under subparagraph 78.1.1 concerning specified nonresident income issues, under 78.1.8 concerning VAT budget refunds, and under 78.1.21 are not subject to suspension. Retain the order and documents showing why the audit was suspended, and compare them with the audit grounds.
• Single tax groups 1 and 2. The moratorium on documentary audits under subparagraph 69.35-1 was in force from 1 December 2023 to 1 December 2024. It did not cover audits related to termination of a sole proprietor’s activity and/or audits requested by the taxpayer.
• Tax address in a relevant territory. Under subparagraph 69.35-1, the tax address on the date the occupation, active hostilities, or possible hostilities began is relevant. The moratorium on documentary audits applies until the last day of the month in which the relevant circumstance ends, or, if the taxpayer changes location to another territory of Ukraine, until that change is state-registered. Each category has exceptions for unscheduled audits, including those requested by the taxpayer, on grounds specified in Article 78, and concerning specified violations of currency legislation. For territories where hostilities are possible, the list of exceptions is broader. Compare the specific audit ground with subparagraph 2, 3, or 4 as applicable, not just with the sole proprietor’s address.
• Restrictions on scheduled audits under subparagraph 69.35-2. They were in force from 1 December 2023 through 31 December 2024. The accountant must establish whether the provision allowed the sole proprietor to be included in the plan based on the type of activity or specified criteria. In particular, based on the 2021 tax return, business income must be at least UAH 10 million, and total declared expenses must be at least 75% of the total annual income reported in that return. The provision also contains other criteria and rules for applying them. The sole proprietor’s absence from the audit plan alone is not enough to conclude that an audit was not conducted because of a statutory restriction.

For territorial conditions, compare the tax address, dates of changes, and relevant periods against the List of Territories under Order No. 376. Record the specific provision and circumstances of its application in the archive table. The end of one moratorium does not cancel other grounds for continued retention.

What to consider if no documentary audit has taken place

The State Tax Service of Ukraine (STS) takes the position that documents should be retained longer. In its guidance on sole proprietor documents where no documentary audit has taken place, the Main Department of the STS in Ivano-Frankivsk Region states that documents should be retained beyond the periods in paragraph 44.3, including for more than five years if no documentary audit has been conducted. The tax authority refers to the duty to provide documents after an audit begins and to special wartime rules.

This is the position of a tax authority. The statutory minimum for ordinary sole proprietor documents remains 1,095 days, subject to applicable extensions, while paragraph 44.4 separately provides for retaining documents related to audits and disputes.

A cautious practical approach for the owner: if there has been no documentary audit, retain the archive and, before destroying it, agree with an accountant or tax lawyer on the grounds and periods applicable to the specific documents. To obtain guidance on your own circumstances, you can request an individual tax consultation from the tax authority. The age of a folder alone is not enough to decide to destroy it.

How to review an archive

The owner or accountant can maintain an archive table. Group documents only when they have the same category, start date, and grounds for extension. Consider documents for different returns or a separate court dispute separately.

1. Determine the category. Establish the minimum under paragraph 44.3 and any other, longer period that applies to a specific document.
2. Record when the period starts. For documents supporting a return, record its filing date or the filing deadline if it was not filed; for other documents, record the relevant transaction or expiry of the permit. If amended returns were filed, account for documents needed to substantiate changed figures and the periods for review of amendments under paragraph 102.1.
3. Identify suspensions and extensions. Account for the rules in force for the relevant periods, paragraph 102.3, and subparagraph 69.36. Keep evidence of when circumstances affecting the period began and ended.
4. Check the status of audits and disputes. Review audit reports, decisions, and appeal deadlines. If no audit took place, separately consider the STS position.
5. Check goods still in stock. Even after the tax minimum period has expired, Procedure No. 496 requires that documents remain at the point of sale until the last unit of the relevant goods is disposed of.
6. Record the decision for each document group. Note the grounds for continued retention or the conclusion that retention has ended. Until the decision is final, keep originals and backups accessible.

Paragraph 44.4 also provides for a special 1,095-day extension for specified documents after receiving information from the controlling authority under paragraph 86.14 about a possible improper benefit to an official of a foreign state. If you receive such a notice, separate the related documents and account for this extension.

If a return was not filed, subparagraph 102.2.1 allows the relevant monetary liability to be assessed without the general limitation period. First, address the unfiled return and determine which documents are needed to prepare it and for possible review. For an old archive, decide whether retention has ended based on the specific documents and circumstances of the business.

Penalties for unrecorded goods

Article 20 of Law No. 265/95-VR provides for a financial penalty for selling unrecorded goods and/or failing to provide, during an audit, documents confirming that goods are recorded at the point of sale. The penalty is the value of the relevant unrecorded goods at selling prices, but not less than ten tax-free minimum incomes of citizens. The Article contains an exception for sole proprietors who are single tax payers and not VAT payers, subject to the special product categories listed above.

Paragraph 14 of Section II of this Law provides territorial exemption from liability for violations committed in the sale of goods or provision of services starting on 1 October 2023 in temporarily occupied territories of Ukraine and areas of active or possible hostilities. It applies through the relevant date when temporary occupation, hostilities, or the possibility of hostilities ends, according to the official list. The exception to this exemption is a violation of settlement transaction procedures when selling excisable goods.

To apply the territorial rule, the owner or accountant must compare the store address and violation date with the List of Territories approved by Order No. 376 of the Ministry for Communities and Territories Development of Ukraine dated 28.02.2025. Find the territory, determine its category, and compare the violation date with the start and end dates of the relevant period. Retain a copy of the relevant entry together with a document confirming the store address.

Under paragraph 1-1 of Resolution No. 1364 of the Cabinet of Ministers of Ukraine dated 06.12.2022, if the end date of hostilities, the end of the possibility of hostilities, or the end of temporary occupation is not specified, the territory retains its relevant status. If periods in the List change, a new period starts on the day after the previous period ends. The territorial exemption concerns liability under Law No. 265/95-VR; continue to meet accounting and documentation obligations.

Inventory Records Form in Torgsoft: setup and printing

Generating the Form in Torgsoft requires the paid additional option “Облік товарних запасів” (Inventory Records); activation takes the number of workstations into account. An accounting center is a store or warehouse in the software. The Start license provides one center, while Ultra and the terminal version support multiple centers and transfers. To operate remote locations over the internet simultaneously using a shared server database, the terminal version is required among these licenses. Torgsoft Online is subscription based, with the software and database hosted on Torgsoft’s server. Before payment, confirm compatibility of the option and the number of workstations under the license terms and additional options.

The owner or person responsible for accounting enables “Використовувати для поточного робочого місця” (Use for the current workstation) under “Налаштування → Параметри → Додаткові опції → Форма обліку товарних запасів” (Settings → Parameters → Additional Options → Inventory Records Form). Then, under “Склад → Форма ведення обліку товарних запасів” (Warehouse → Inventory Records Form), they set the start date, entrepreneur, and location centers. For a warehouse and sales floor belonging to one store, select both centers: transfers between them will not be displayed.

Compare the opening amount with the inventory description; if there are discrepancies, review the date, cost, and whether negative balances are included. Services are not included in the amounts. The “Товар” (Goods) action opens the list of goods included in the row. Before printing, remove the analytical filters “Вид документа” (Document type), “Фіскальність товару” (Fiscal status of goods), and “Тип документа” (Document type), and check the entries against the documents using the Form generation procedure.

Click “Друк” (Print) and check the entrepreneur details, tax number, addresses, documents, and amounts, especially column 8. Correct details under “Налаштування → Підприємство → Змінити” (Settings → Enterprise → Edit) and “Налаштування → Торговельна мережа” (Settings → Retail Network), where accounting centers can also be edited. If fields are blank, the software may take data from another settings level; if there are several centers, it may take data from the first one. The tax address is taken from the “Місто” (City) and “Адреса” (Address) fields of the retail network. Follow the rules for completing the Form details, then reopen the print preview after making corrections. Keep the final Form with documents for the actual transactions.

Official laws and guidance for handling documents

• Tax Code of Ukraine dated 02.12.2010 No. 2755-VI — paragraphs 44.1, 44.3–44.7, and 102.1–102.3; Article 177, including paragraphs 177.7, 177.8, and 177.10 and subparagraph 177.4.5; paragraph 296.1; paragraph 52-2 and subparagraphs 69.2-2, 69.9, 69.28, 69.35-1, 69.35-2, and 69.36 of subsection 10 of Section XX. For applying temporary rules to the relevant periods, Articles 44 and 102 and subparagraph 69.9 in the versions dated 07.03.2022, 17.03.2022, 05.04.2022, 27.05.2022, 25.11.2022, 03.01.2023, and 01.08.2023.
• Law of Ukraine “On the Use of Settlement Transaction Registrars in Trade, Public Catering, and Services” dated 06.07.1995 No. 265/95-VR — Article 2, paragraph 12 of Article 3, Article 20, and paragraph 14 of Section II, “Final Provisions.”
• Order No. 496 of the Ministry of Finance of Ukraine dated 03.09.2021, “On Approval of the Procedure for Keeping Inventory Records for Individual Entrepreneurs, Including Single Tax Payers” — Sections I–II and the appendix containing the Form.
• Resolution No. 231 of the Cabinet of Ministers of Ukraine dated 16.03.2017, “On Approval of the List of Groups of Technically Complex Household Goods Subject to Warranty Repair (Servicing) or Warranty Replacement for the Purposes of Applying Settlement Transaction Registrars” — paragraph 1 and the approved List.
• Law of Ukraine “On Accounting and Financial Reporting in Ukraine” dated 16.07.1999 No. 996-XIV — Articles 2 and 9.
• Order No. 88 of the Ministry of Finance of Ukraine dated 24.05.1995, “On Approval of the Regulation on Documentary Support for Entries in Accounting Records” — paragraphs 1.1 and 1.4, and Chapter 2.
• Resolution No. 651 of the Cabinet of Ministers of Ukraine dated 27.06.2023 on ending the quarantine established throughout Ukraine to prevent the spread of COVID-19 — paragraph 1 on the end of quarantine.
• Order No. 376 of the Ministry for Communities and Territories Development of Ukraine dated 28.02.2025 approving the List of Territories where hostilities are or were conducted or that are temporarily occupied, registered with the Ministry of Justice of Ukraine on 11.03.2025 under No. 380/43786 — paragraph 1 and the approved List.
• Resolution No. 1364 of the Cabinet of Ministers of Ukraine dated 06.12.2022 on compiling the list of territories where hostilities are or were conducted or that are temporarily occupied — paragraphs 1, 1-1, 1-6, and 1-7 on compiling and updating the List, periods, and identifying territories.
• Guidance from the Main Department of the State Tax Service in Ivano-Frankivsk Region, “Must a sole proprietor or an individual engaged in independent professional activity retain source documents for more than 1,095 or 1,825 days if the STS has not conducted a documentary audit?” — the tax authority’s position on retaining documents when no documentary audit has taken place.