Paid reservation for persons liable for military service: How it will affect entrepreneurs and sole proprietors in Ukraine

Ukrainian lawmakers are considering the possibility of introducing paid mobilization armor for entrepreneurs and individual entrepreneurs (IEs) in the Armed Forces of Ukraine. According to the initiative being considered by the Verkhovna Rada, the monthly payment for the armor may range from UAH 6 to 50 thousand.

Dmytro Natalukha, Chairman of the Verkhovna Rada Committee on Economic Development, shares that lawmakers have different opinions on the amount of the monthly payment proposed for entrepreneurs. Varying from 6 to 50 thousand UAH, large enterprises and individual entrepreneurs express their ideas about the optimal amount.

Natalukha also notes that there is a possibility of a different approach to individual entrepreneurs, adapted to their needs and capabilities. Representatives of large companies express indignation that even a small payment may be unaffordable for some entrepreneurs.

Previously, sole proprietors had the option of reserving themselves from mobilization based on a decision of the Cabinet of Ministers, provided they fulfilled a defense order or performed other work for local authorities and military administrations.

Natalukha notes that there is a risk of abuse when companies hire employees under the FOP scheme, which can be used to evade tax deductions. However, he emphasizes that they are carefully considering the possibility of booking for all entrepreneurs.

Vasyl Voskoboinyk, President of the All-Ukrainian Association of International Employment Companies, emphasizes the spread of the practice of employment on the basis of individual entrepreneurship, especially in the IT sector. He also points to the need to regulate paid reservations for those who are willing to pay significant amounts to defer mobilization.