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DISCOVERY OF INDIVIDUAL OF AN ENTREPRENEUR. TAXATION SYSTEMS

Doing business in the legal form of an individual entrepreneur (hereinafter – FOP) is very popular, because at the beginning of 2022 in Ukraine there were more than 2 million registered FOP. This form of entrepreneurship is quite attractive because it saves on taxes.

However, without the help of an expert in tax law, it is difficult to choose the most appropriate system of taxation, taking into account the constant changes in legislation and restrictions.

To attention! At present, the current legislation provides for the possibility of conducting a sole proprietorship on a general or simplified system of taxation. Thus, the general system has no restrictions, but a simplified system – depending on the group has restrictions on the activities provided by the NACE, the amount of income and the number of employees.

In the first group of taxation, a natural person-entrepreneur may not use the labor of employees, have an income of more than 167 minimum wages set for January 1 of the year and engage only in retail trade in markets or the provision of household services according to the list.

Entrepreneur pays the following taxes on 1 group of the simplified system: the single tax – up to 10% of the subsistence minimum established on January 1 of the corresponding year, SSC – 22% of the minimum wage.

In the second group of taxation, a natural person-entrepreneur may use the work of employees in the amount of not more than 10 people, the amount of income may not exceed 834 minimum wages set for January 1 of the year. It is allowed to engage in activities in the restaurant business, production and sale of goods, provision of services to single taxpayers and citizens. However, this category of entrepreneurs has many prohibitions among the activities.

The sole proprietor pays the following taxes on the 2nd group of the simplified system: the single tax – up to 20% of the minimum wage set on January 1 of the respective year, SSC – 22% of the minimum wage.

In the third group of taxation, a natural person-entrepreneur has no restrictions on the number of employees and type of economic activity. The amount of income of such self-employed person should not exceed 1167 minimum wages set for January 1 of the respective year.

The entrepreneur pays the following taxes in group 3 of the simplified system: a single tax – 3% of income if the entrepreneur is a VAT payer and 5% if he is not. Payment of SDRs remains the same as for FOP 1 and 2 groups.

As for the 4th group of the simplified system, it can be individuals – entrepreneurs who operate exclusively within the farm, subject to compliance with a set of requirements provided by law.

In this case, the object of taxation will be the area of ​​agricultural land or water fund lands. The tax base will be a normative monetary assessment.

It is worth noting that under the simplified taxation system, entrepreneurs are exempt from charging and paying military duty.

The sole proprietorship system can be chosen by the sole proprietor immediately upon registration in cases when he plans to engage in activities prohibited for the simplified system, exceeds the established income limit, or requires methods of calculation prohibited for the simplified system (barter, non-monetary payments).

Personal income tax on the general system will be paid by PIT – 18%, VAT – 1.5%, and SSC – 22%.

Each tax system has its advantages and disadvantages, to choose the best option for you after calculating all the risks, contact the specialists of Prikhodko & Partners.

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