Фото: How can a sole proprietor become a VAT payer?

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How can a sole proprietor become a VAT payer?

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Registration of VAT payers is carried out on the basis of Section V of the Tax Code of Ukraine and the Regulation on the registration of value-added tax payers, approved by the Order of the Ministry of Finance of Ukraine dated 14.11.2014 No. 1130. A person registered as a VAT payer is assigned an individual tax number, which is used to pay VAT, is uniform for the entire information space of Ukraine and is retained by the VAT payer until the registration of the VAT payer is canceled.

A person is a registered VAT payer from the corresponding date of registration entered in the Register of Value Added Tax Payers.

Depending on the grounds, a distinction is made between mandatory and voluntary registration of an individual entrepreneur as a VAT payer.

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Mandatory registration of sole proprietors as VAT payers

Individual entrepreneurs are subject to mandatory registration as VAT payers.

If the total amount from transactions on the supply of goods/services subject to taxation, including using a local or global computer network, accrued (paid) during the last 12 calendar months, in aggregate exceeds UAH 1,000,000 (except for single tax payers).

If the total amount from transactions on the supply of goods/services subject to taxation, including using a local or global computer network, accrued (paid) to such a person during the last 12 calendar months, in aggregate exceeds UAH 1,000,000 (excluding value added tax), such a person is obliged to register as a tax payer with the regulatory authority at his location (place of residence).

The rules of mandatory registration do not apply to single taxpayers.

If mandatory registration is not carried out, the offender is liable for failure to accrue or pay this tax at the level of a registered taxpayer without the right to accrue a tax credit and receive budgetary compensation.

A person subject to mandatory registration as a taxpayer submits a registration application to the regulatory authority at his location (place of residence). The registration application is submitted to the regulatory authority no later than the 10th day of the calendar month following the month in which the excess of the volume of taxable transactions was first established.

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Voluntary registration of sole proprietors as VAT payers

Individual entrepreneurs may register as VAT payers on a voluntary basis if the volume of transactions subject to VAT is absent or is less than the million mark, based on a submitted application (except for single tax payers).

Exception: VAT payers may be those who have chosen a simplified taxation system:

  • Group 3, paying a single tax at a rate that provides for the payment of value added tax;
  • Group 4.

Such registration occurs upon the application of the person for VAT registration, provided that the volume of transactions subject to VAT is absent or is less than the million mark.

In case of voluntary registration of persons as VAT payers, the registration application is submitted no later than 20 calendar days before the start of the tax period from which such persons will be considered VAT payers and have the right to a tax credit and the issuance of tax invoices.

In the absence of grounds for refusing to register a person as a VAT payer, the supervisory authority is obliged to enter a record of registration of such person as a VAT payer into the Register of VAT Payers within 3 working days after receipt of the registration application.

The issuance of a VAT payer certificate to a business entity is not provided for in connection with the cancellation of this document.

Individual entrepreneur and VAT

You can verify your registration as a VAT payer by:

  • by submitting a request for an extract from the VAT payer register to the supervisory authority;
  • using the "Electronic Payer's Account" service on the SFS web portal, "Information from registers" → "VAT payer register data".

The form for a request for an extract from the taxpayer register is provided in Appendix 11 to the Regulation on the registration of value-added taxpayers, approved by Order of the Ministry of Finance of Ukraine dated 14.11.2014 No. 1130.

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Transactions that are not subject to VAT

Transactions that are not subject to VAT taxation under Art. 196 of the Tax Code of Ukraine (they are reflected in line 3 of the VAT declaration).

Transactions that do not fall under the definition of a VAT taxable object under Art. 185 of the Tax Code of Ukraine (in particular, the supply of services outside the customs territory of Ukraine in accordance with paragraphs 186.2 and 186.3 of the Tax Code). Such transactions are reflected in line 4 of the VAT declaration.
Exempt from VAT taxation under Art. 197, subdivision 2 of section XX of the Tax Code of Ukraine and under international treaties (reflected in lines 5 and 5.1 of the VAT declaration).

Although such transactions do not affect the amount of VAT tax liabilities payable for the reporting period, they should be shown in the VAT reporting, otherwise the current requirements for tax accounting will be violated. And for this, administrative liability is provided under Art. 163-1 of the Code of Administrative Offenses of Ukraine.

According to the provisions of paragraph 46.1 of the Tax Code of Ukraine, appendices to the VAT tax return are an integral part of it. But according to paragraph 47.1.1 of the Tax Code of Ukraine, legal entities and individuals - entrepreneurs, as well as officials of legal entities, are responsible for violating the procedure for filling out tax reporting documents. In the event that transactions are exempt from VAT, a tax invoice is drawn up.

Registration as a VAT payer is not a complicated process, but it requires an understanding of tax legislation and attention to detail. Incorrect execution of documents or missing deadlines can lead to fines. Trust this important procedure to professionals by using the accounting outsourcing services from Prikhodko & Partners. For a consultation, fill out the form below.

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