New tax rates for Ukrainian FOPs from July 1

We are just getting used to the changes that were introduced at the beginning of January, and it is already time to adapt to new changes related to the increase of the minimum wage from April 1. From July 1, new tax rates have been established for Ukrainian individual entrepreneurs. In this article, we will consider the key points regarding the new tax rates for FOPs and provide a legal analysis of the situation.

The minimum and maximum size of the EUS.

A single contribution to mandatory state social insurance (SSI) is mandatory for all employees and self-employed individuals. EUS is calculated exclusively in the national currency.

From January 1, 2024, the minimum monthly income tax for sole proprietorships — single tax payers is UAH 1,562, and the maximum is UAH 23,430. From April 1, 2024, in connection with the increase of the minimum salary to UAH 8,000, these amounts increased to UAH 1,760 and UAH 26,400, respectively.

Self-employed persons who have their main place of work and persons engaged in independent professional activity are exempted from paying personal income tax for themselves, if the employer has paid the minimum contribution for them.

Until the end of martial law, the payment of social security for FOPs is voluntary, but in this case they are not credited with insurance experience.

What is the maximum annual income allowed for FOPs?

In Ukraine, there are two systems of taxation for entrepreneurs: simplified and general. The simplified system provides for different flat tax rates and certain restrictions depending on the group. If the established income limits are exceeded, the FOP can be transferred to the general taxation system.

For July, these income limits for entrepreneurs are:

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  for 1 group (167 levels of minimum salary) — 1,336,000 hryvnias;
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  for group 2 (834 amounts of the minimum salary) — 6,672,000 hryvnias;
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  for the 3rd group (1,167 amounts of the minimum salary) — 9,336,000 hryvnias.

The need for legal support when paying taxes

Legal assistance in paying taxes to sole traders is critically important, as it helps:

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  Calculate taxes correctly and avoid mistakes.
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  Check and submit tax returns on time.
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  Consult on tax issues and use benefits.
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  Optimize the tax burden to reduce costs.
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  Appeal tax decisions and fines, protecting the interests of FOPs.
• 
  It is important to respond to changes in legislation.

Legal support ensures compliance with laws, protection of rights and reduction of risks in tax matters.

The role of attorneys in cases involving the payment of taxes by sole proprietorships

Lawyers play an important role in cases related to the payment of taxes by FOPs:

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  Consultations on tax issues: Lawyers provide expert advice on the correctness of tax calculations, the use of tax benefits and optimization of the tax burden.
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  Preparation and verification of tax returns: They help to correctly fill out and submit returns, which allows you to avoid errors and fines.
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  Appealing tax decisions: Lawyers represent the interests of sole traders in cases of appeals against tax decisions or fines, ensuring the protection of the client's rights.
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  Legal support in cases with tax authorities: They represent FOPs in negotiations and courts, helping to resolve disputes with tax authorities.
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  Analysis of changes in legislation: Lawyers monitor changes in tax legislation and advise clients on how these changes may affect their activities.
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  Developing a tax planning strategy: They help develop a strategy to reduce tax costs and ensure effective financial management.

Thus, lawyers help FPOs to ensure compliance with tax requirements, reduce risks and protect their interests in case of disputes with tax authorities.

The cost of the services of a lawyer

The cost of a lawyer's services may vary depending on the type of service, the complexity of the case, the lawyer's experience and regional characteristics. Consultations can include both an hourly fee and a fixed fee, and legal support can be calculated on the basis of fixed rates or hourly costs. Appeals may also involve a combination of fixed and variable costs. To avoid misunderstandings, it is important to discuss in detail all conditions and costs with a lawyer in advance.