Whether a sole trader with no income needs to file a tax return and pay taxes: expert explanation

On 1 January, the reporting period for the previous year begins for individual entrepreneurs. Each group of entrepreneurs has its own characteristics. A completely separate category is made up of those who did not receive any income during the reporting period. Find out all the details of taxation and declaration in the first quarter of 2025

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From 1 January 2025, the reporting period for individual entrepreneurs for the previous year, 2024, begins. The peculiarities of such reporting will differ for entrepreneurs on the general and simplified taxation systems. It is important to pay attention to all the details, as errors in the declaration may result in fines. Many sole proprietors who ceased their activities or had no income in 2024 do not know whether they need to pay taxes and file a declaration. The answers to these and other questions are provided by experts on doing business in Ukraine - we have collected the most necessary information in this article.

Do entrepreneurs with no income have to file tax returns?

Entrepreneurs who have no income or have ceased their activities must still file tax returns.

If an entrepreneur had no income for the reporting period, he or she submits a so-called ‘zero declaration’. The tax authorities cannot check whether there was income for the reporting period or not, so reporting is mandatory. If the declaration is not submitted or is submitted late, the taxpayer faces fines.

If you decide to liquidate your individual entrepreneurs, there are several ways to do so - for more information, visit Visit Ukraine.

Submission of electronic reporting for sole proprietorships of different groups

Groups 1 and 2 individual entrepreneurs

1. The annual report must be submitted by 3 March 2025.

2. The unified social contribution for the 4th quarter of the previous year must be paid by 19 January 2025 (UAH 5,280 voluntarily).

3. Pay the military fee for January by 20 January 2025.

4. Pay the unified social tax for January by 20 January 2025 (UAH 302.80 for group 1 sole proprietors and UAH 1600 for group 2 sole proprietors).

Group 3 individual entrepreneurs

1. Submit an annual report for 5% by 10 February 2025.

2. The unified social contribution for the 4th quarter of the previous year must be paid by 19 January 2025 (UAH 5280 voluntarily).

4. Pay the unified social tax for the 4th quarter by 19 February 2025.

Please note! Starting from 1 January, the unified social tax will be mandatory for most entrepreneurs and will be 22%.

Earlier, we told you that taxes for all groups of sole proprietors will increase from 1 January 2025. More information is available on the website.

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How can I file an electronic tax return?

In accordance with clause 16.1.3 of Article 16 of the Tax Code, taxpayers are obliged to submit reports, including declarations, to the supervisory authorities.

Pursuant to clause 36.1 of Article 36 of the Tax Code, a taxpayer is obliged to calculate, declare and pay the amount of taxes for the reporting period.

In accordance with clause 17.1.15 of Article 17 of the Tax Code, reporting can be done in an electronic office or in paper form, unless electronic filing is mandatory. Also, in 2024, sole proprietors of groups 1, 2 and 3 who pay the Single Tax will be able to do so through Diia if they

- do not have employees

- are not VAT payers;

- have not changed their taxation group since the beginning of 2021;

- are not in the process of terminating their business activity.

If you need to change your taxation group, you can find detailed instructions here.

In accordance with clause 42.6 of Article 42 of the Tax Code, the electronic cabinet is open 24 hours a day, except for the time required for its maintenance. Maintenance can be carried out only from 20:00 to 8:00, except for the day when tax returns are due.

At all stages of declaration, tax deduction, execution of contracts and certificates of completion, you can contact our business specialists in Ukraine. Feel confident and avoid unforeseen situations in the process of developing your own business!

Just a reminder! One of the provisions of the new tax law is an increase in the military duty. Details are on the website.

Photo: News / Lviv Regional State Administration

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