In 2024, Individual Entrepreneurs (IEs) will have some critical changes in taxation that are worth considering. One of the key innovations is the increase in income limits for different groups of entrepreneurs.
Income limits for individual entrepreneurs in 2024
- Group I: up to UAH 1 185 700
- Group II: up to UAH 5 921 400
- Group III: up to UAH 8 285 700
If these limits are exceeded, sole proprietors must switch to a higher taxation group or switch to the general system if the limit in Group III is exceeded.
Single tax rates and amount for individual entrepreneurs in 2024
- Group I: UAH 302.80 (up to 10% of the subsistence minimum)
- Group II: UAH 1420.00 (up to 20% of the minimum wage)
- Group III: 5% of income or 3% with VAT
Exceptions are single Groups I and II taxpayers during martial law in the occupied territories or the war zone. Starting from August 1, 2023, the obligation to pay the Single Tax will be returned, except for entrepreneurs in these territories. You can check which territory is officially recognized as being in the combat zone by reading the Order of the Ministry of Reintegration No. 309 dated 22.12.2022, which approves the list of such territories.
Payment of the unified social contribution in 2024
- From January 01 to March 31, 2024, it will be UAH 1562.00 (22% of the minimum wage)
- and from April 01, 2024, it will be UAH 1760.00. This is due to the increase in the minimum wage.
Annual reports on single social contributions for individual entrepreneurs
Even if you did not pay USC contributions in 2023, submitting annual reports with zero values is vital for the tax authorities. This indicates the use of benefits and compliance with the requirements. Failure to submit an annual report may result in penalties.
Taxes for sole proprietors with employees
In 2024, the minimum wage will change, which means that the taxation of sole proprietorships with employees will also change. Below is a detailed calculation of the ratio of the minimum wage to the payment of basic taxes:
- Personal income tax – UAH 1,278
- Military duty – UAH 106.5
- Unified social contribution – UAH 1562
- Individual income tax – 1440 UAH
- Military fee – 120 UAH
- Unified social contribution – 1760 UAH
With the changes in the legislation in 2024, it is crucial to follow the updates and comply with the requirements on time. Stay up-to-date with tax innovations and follow the updates in the legislation to manage your business successfully. Our team will be happy to advise on the taxation of sole proprietorships and services for FOP registration and accounting.
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