Military levy tax for individual entrepreneurs and the Single Tax in Ukraine
Today, all entrepreneurs are discussing tax increases. Some say that the single tax will double, while others have already decided it will be impossible to work. As the saying goes, “Fear has big eyes.” We decided to dispel the myths and tell you in detail what is happening.
Taxes for individual entrepreneurs: what is known in September 2024?
We have the Draft Law of Ukraine, “On Amendments to the Tax Code of Ukraine on Peculiarities of Taxation during the Period of Martial Law,” No. 11416-d, dated August 30, 2024. This draft law will introduce a military tax for individual entrepreneurs if adopted.
The Government plans to set the following rates for this tax: military tax for the 1st and 2nd groups of single-tax individual entrepreneurs—10% of the minimum wage. As of 2024, the minimum wage is UAH 8,000.
- For Groups 1 and 2 of the single tax, the military tax will be UAH 800 per month.
- For the 3rd group of sole proprietors—1% of the income received.
The military tax payment terms are planned as follows:
- For groups 1 and 2, the military tax must be paid by the 20th of each month.
- For the third group, sole proprietorships must pay no later than 10 calendar days after the end of the reporting quarter.
For how long is the military tax planned to be introduced?
The Draft Law states that the payment period should be from October 1, 2024, to December 31, the year martial law is lifted or terminated.
What changes should we expect regarding the single tax?
We can reassure you that this type of tax for individual entrepreneurs remains unchanged.
The rates will stay the same until the end of 2024. Let’s recap them:
- 1—302.80 UAH/month
- 2—1420 UAH/month
- 3—5% of income and 3% for VAT payers
What can you expect from the tax authorities in 2025?
A critical piece of news may be the return of the mandatory payment for the unified social contribution. Starting on January 1, 2025, the Government plans to resume paying the contribution to almost all entrepreneurs. Exceptions may be made for persons who receive an old-age pension, are disabled, or have reached the age set out in Article 26 of Law No. 1058 and receive a pension or social assistance by the law.
The amount of the unified social tax should remain the same—UAH 1760 per month. According to the Draft State Budget for 2025, the minimum wage will be UAH 8000, the same as in 2024.
Given the above, we can conclude that taxes are likely to increase. Though unpleasant, we face changes and advise you not to panic.
Here’s a little lifehack: if you are an entrepreneur in Group 1 or 2 and do not receive income but do not want to close your entrepreneurship, switching to Group 3 or the general system is better. If you do this, you will not have to pay a single tax or a military tax.
If you need advice on taxation or registration of a sole proprietorship, our team will be happy to help! Please leave a request through the form below Viber, Telegram bot, WhatsApp chat.
