Simplified taxation system reform: fewer groups and more control

The Government of Ukraine has approved a reform of the simplified taxation system that envisages radical changes to reduce abuse. According to the National Revenue Strategy, adopted on December 27, it is proposed to merge some groups and gradually restrict access to the simplified system for legal entities.

According to the EP, the key aspects of the reform include reducing the number of groups in the simplified system, banning legal entities from the system, and introducing new single tax rates for individual entrepreneurs in different groups.

According to the reform, sole proprietors in the first group of the simplified taxation system will pay tax as a percentage of income instead of a fixed amount, as is currently the case.

An important part of the reform will also be an increase in tax rates for individual entrepreneurs in the second and third groups, who will gradually start paying tax as a percentage of income.

According to the reform, agricultural producers in the fourth group will have their tax rates increased to encourage them to switch to the general taxation system. The types of activities in the first group of the simplified taxation system will also be limited.

All simplified taxpayers will be required to use cash registers and keep records of goods, but this accounting will be as simplified as possible. It is noted that these changes will be implemented in stages over the period from 2024 to 2030 to prevent abuse of the taxation system.