Main points
- Individual entrepreneurs in Ukraine pay 15% of the single tax in cases of exceeding the income limit, carrying out unauthorized activities, or using other payment methods.
- The 15% rate is additional to the basic rate and applies only to “irregular” income.
Who will have to pay a 15% tax / Collage of Channel 24, photo Shutterstock
There are rules according to which individual entrepreneurs are obliged to pay 15% of the single tax. This applies to individual entrepreneurs of all groups.
Who should pay the 15% single tax in Ukraine?
This is about non-compliance with the requirements of the Tax Code, as stated on the website of the State Tax Service.
The increased rate of 15% applies to income of individual entrepreneurs of groups 1–3 in the following cases:
- exceeding the income limit;
- receiving income from activities not listed in the register of single tax payers;
- using a different method of calculation than those permitted by the Tax Code;
- carrying out activities prohibited for the simplified system (except for single tax payers of the third group – electronic residents (e-residents);
- conducting 1 or 2 groups of activities by an individual entrepreneur not provided for in the relevant group.
In particular, the single tax for individual entrepreneurs of group 1 is a percentage of the subsistence minimum, for group 2 – of the minimum wage.
At the same time, there is no fixed rate for group 3. In this case, the individual entrepreneur pays as follows:
- 3% of the amount of income if you are a VAT payer;
- 5% of the income amount if you are not a VAT payer.
While the 15% rate is provided for by paragraph 293.4 of the Tax Code of Ukraine and is applied not instead of, but in addition to the basic rate of the single tax. This means that an individual entrepreneur pays tax at the standard rate on his “correct” income, and 15% on income that was received in violation of the rules. This is stated on the Factor website.
Please note! These amounts must be declared as a separate line in the tax return.
How much should a sole proprietor exceed his “limit”?
In order to have to pay 15%, the annual income limit must be exceeded . Each group of the single tax has a clearly defined threshold.
If the entrepreneur exceeds the limit, then the 15% is charged on the amount of the excess, and not on the entire income. In addition, the individual entrepreneur is obliged to either switch to another group or to the general taxation system.
What rules must an individual entrepreneur follow in order to avoid paying a 15% tax?
Individual entrepreneurs of groups 1 and 2 must carry out only those types of activities that are listed in the Register of Single Tax Payers. If an entrepreneur receives income from a type of activity that is not listed in the KVEDs, such income is not considered allowed for the simplified system.
Entrepreneurs are prohibited from using non-cash payments (payment with goods, services, etc.). Income received in this way is automatically subject to a 15% single tax, regardless of the individual entrepreneur's group.
If an individual entrepreneur receives income from an activity that a person cannot engage in on a single tax, then all income is taxed at a rate of 15%. A forced transfer to the general taxation system is also possible. The exception is payers of group 3 – e-residents.
When an entrepreneur of group 1 or 2 receives income from activities that are not provided for in his group, this income is also taxed at a rate of 15%.
Important! The 15% single tax rate is a financial sanction for violating the rules of the simplified taxation system. It cannot be voluntary and has no alternatives.
What else should individual entrepreneurs in Ukraine know?
- Individual entrepreneurs can pay taxes in various ways. In particular, through a bank, the Diya application, or the Taxpayer's Electronic Cabinet. Each option has its pros and cons, and the entrepreneur can choose the method that is convenient for him.
- At the same time, small and medium-sized businesses in Ukraine can receive a one-time payment. Its amount ranges from 7,500 to 15,000 hryvnias. Thus, the government provides an opportunity for individual entrepreneurs to purchase a generator or fuel during the energy crisis.