Sole proprietors without income may be fined: what common mistake to be aware of
Even if an individual entrepreneur did not receive income, this does not automatically exempt them from submitting tax reports. According to Article 49.2 of the Tax Code of Ukraine, the obligation to submit a declaration is determined not only by the presence or absence of profit but also by the taxation system and other tax obligations of the entrepreneur.
Thus, individual entrepreneurs of groups 1 and 2 under the simplified taxation system generally pay the single social contribution regardless of whether they earned income. Therefore, they are required to submit an annual declaration containing information about the SSC.
Different rules apply to sole proprietors of group 3. If there was no income during the first quarter, half-year, or nine months, the declaration for these reporting periods may not be submitted. However, the annual declaration is mandatory.
Failure to submit or late submission of tax reports entails financial liability under the law. The fine is 340 hryvnias for the first violation and 1,020 hryvnias for a repeated similar violation within a year after the first fine was applied.
At the same time, the law provides exceptions. In the absence of other taxable objects, certain categories of entrepreneurs exempt from paying SSC for themselves may not submit a declaration. These include pensioners by age or length of service, persons with disabilities, as well as citizens of pension age who receive a pension or state social assistance.
Additionally, entrepreneurs should monitor the accuracy of information in the Unified State Register. If inaccuracies arise in documents submitted by the applicant, to correct them it is necessary to contact the state registrar and pay an administrative fee for making changes to the register. The amount depends on the type of registration action and the changes to be made.
As previously reported by «Judicial and Legal Newspaper», the State Tax Service registers a single tax payer by entering a record into a special register. It is maintained by the central executive authority responsible for implementing tax policy.
In certain cases, including for newly established individual entrepreneurs, special deadlines for acquiring the status of a single tax payer are provided. Thus, sole proprietors who submit an application by the end of the month of state registration and choose the first or second group are recognized as single tax payers from the first day of the following month.
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