Named the main mistakes due to which individual entrepreneurs of group II most often lose the status of "single taxpayer"
The Main Department of the State Tax Service in the Kyiv region reminded that staying in group II of the single tax is possible only if the requirements of the Tax Code of Ukraine are met. Violation of the established rules may lead to taxation of certain incomes at a rate of 15 percent and mandatory transition to the general taxation system.
The State Tax Service has prepared a selection of the most common mistakes that entrepreneurs should avoid.
Mistake #1. Providing services to customers to whom it is prohibited
An individual entrepreneur of group II has the right to provide services exclusively to the population and other single tax payers. If services are provided to legal entities or individual entrepreneurs on the general taxation system, this is a violation of the requirements of subparagraph 2 of paragraph 291.4 of article 291 of the Tax Code of Ukraine.
At the same time, this restriction applies only to services. A group II taxpayer can sell goods, including those of their own production, to any buyers regardless of their tax status.
Mistake #2. Using non-monetary forms of settlement
Single tax payers must conduct settlements exclusively in monetary form — cash or cashless.
Barter, offsetting of mutual claims, and other non-monetary forms of settlement contradict the requirements of paragraph 291.6 of article 291 of the Tax Code of Ukraine and may be grounds for losing the right to the simplified system.
Mistake #3. Exceeding the annual income limit
In 2026, the maximum income volume for individual entrepreneurs of group II is 7,211,598 hryvnias.
If this limit is exceeded, the excess amount is taxed at a rate of 15 percent. In addition, the entrepreneur is obliged to move to another group of the simplified system or to the general taxation system in the manner established by law.
Mistake #4. Exceeding the allowable number of employees
No more than ten hired employees can work simultaneously in group II.
Employees who are on maternity leave or child care leave are not included in this number. Before hiring a new employee, it is advisable to check whether the established legal limit will be exceeded.
Mistake #5. Conducting types of activities incompatible with the simplified system
Not all types of economic activity are allowed to be carried out in group II of the single tax.
In particular, the legislation prohibits certain types of activities defined in paragraph 291.5 of article 291 of the Tax Code of Ukraine. In addition, from January 1, 2026, according to Law of Ukraine No. 4698-IX, business entities engaged in security activities cannot apply the simplified taxation system.
Before opening a new line of activity, it is advisable to make sure that it is allowed for the chosen group of the single tax.
Mistake #6. Presence of tax debt
Tax debt can also be grounds for canceling the registration of a single tax payer.
If the debt exceeds the amount defined by the Tax Code of Ukraine and remains unpaid for two consecutive quarters, the controlling authority has the right to cancel the registration of the single tax payer.
At the same time, arrears in payment of the single social contribution are not considered tax debt under this provision, but their accumulation also leads to financial liability.
Conclusion of the State Tax Service
Most cases of losing the status of a single tax payer are not related to complex legislative norms, but to non-compliance with basic rules of conducting business. Regular monitoring of income volume, customer base, permitted types of activities, number of employees, and timely payment of taxes will help the entrepreneur continue to enjoy the benefits of the simplified taxation system and avoid undesirable tax consequences.
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