CEA – is a classifier of economic activities, with codes established for different types of business. Each sector of the economy has its own codes. All of them are collected in a single document.
You can view the general list of the classifier of economic activities on the official website of the State Statistics Service of Ukraine at the link https://kved.ukrstat.gov.ua/KVED2010/kv10_i.html
Before opening a sole proprietorship or limited liability company, each entrepreneur registers the classifier of economic activities relevant to his business. In order to choose them correctly, you need to answer the questions:
- what kind of business will you do in general?
- which direction will be the main one?
- will you provide additional services?
When registering a business entity, you will need to indicate the main the classifier of economic activities and others. Having a basic the classifier of economic activities is a must.
Why is it important to choose the classifier of economic activities correctly?
If an entity that is in the general system of taxation received income in the framework of activities that do not fall under the selected the classifier of economic activities – then such income is taxed at a rate of 18% + 1.5%. The risk is that such income is taxed not after deducting expenses, but before, ie from the total amount credited to the account.
As for the simplified taxation system, such income is taxed at a slightly lower rate, namely 15%. The downside of recording such a violation is that you will be required to switch to the general tax system (provided you have previously been on the simplified tax system).
Practice shows that state registrars (notaries less often) refuse to enter more than five the classifier of economic activities codes in the register. However, the law does not provide for such restrictions, so you can legally use an unlimited number of the classifier of economic activities. Even if they do not fit on 1 sheet of the registration application, you simply add another similar application form.
If an agreement has been made, but it does not fall under the classifier of economic activities, which are already reflected in the USR, you will need to add them as soon as possible. Therefore, it is better to take care of it in advance.
However, when registering a business entity on the Internet, you can add the classifier of economic activities without the risk of receiving a refusal. In addition, this method of registration is more convenient and faster.
In addition, it should be noted that there are a number of activities that are prohibited for certain types of taxation systems (for the simplified system). The list of activities that single taxpayers who have chosen the first and second groups have the right to carry out can be viewed on the website of the State Tax Service of Ukraine at the link
If you are not sure about the definition of the NACE code or you have other questions related to taxation and accounting by business entities – contact the specialists of the law firm “Prikhodko and Partners”, we will be happy to answer your questions!