Payment of business taxes from a private individual’s card and other changes in payments
The deadline for payment of taxes is approaching, while funds are lacking in the account of a private entrepreneur or a limited liability company…Can an entrepreneur or a company director pay taxes from their personal card? Yes, it is actually possible. Read the article below for more details.
If you are a director of a limited liability company
As established by the provisions of the Tax Code of Ukraine, a taxpayer can fulfil their tax obligations directly or via a representative or a tax agent (paragraph 36.4 of article 36 of the Tax Code of Ukraine).
Persons who can represent legitimate interests of a taxpayer and keep files related to payment of taxes based on the law or a power of attorney (article 19.2 of article 19 of the Tax Code of Ukraine) are recognized as the taxpayer’s representatives.
Then the provisions of the applicable law can be used. It allows a company head to act on the company’s behalf without authorization, in particular, represent it at state authorities and local self-government bodies, solve issues related to the company’s activities at state authorities and local self-government bodies, solve the issues related to the company’s activities within the scope and in accordance with the procedure defined by its constituent documents. This means that the director does not need a power of attorney.
Note. In order to avoid issues with the tax authority in future, the responsibility of paying taxes on the company’s behalf should be stipulated in the director’s job description.
It should be remembered that not all taxes and charges are allowed to be paid by third parties. The director cannot pay the single social contribution on the company’s behalf. Exceptions are granted to heads of family farms who are allowed to pay contributions on their own behalf and on behalf of such company’s members (part 9, article 25 of the Law on the Single Social Contribution). This means that the director, as a representative of the LLC, can pay a monetary obligation (except for the Single Social Contribution) or a taxpayer’s tax debt related to taxes and charges from the director’s personal card.
Formalizing a payment
Special attention should be paid to filling in a payment instruction for the tax inspectorate to record the amount of tax paid in the integrated card of the Limited Liability Company. In order to avoid an error, the Procedure for filling in the Purpose of Payment detail, as approved by the order of the Ministry of Finance No. 148 of 22.03.2023, should be used. Thus, the following should be specified in the payment instruction:
- Code of payment type;
- Type of tax;
- Period for which payment is made;
- Payer or person on whose behalf payment is made;
- Payer’s code.
It should also be noted that from March 03, 2026, the new requirements were approved by the NBU Resolution No. 20 of 26.02.2026, with regard to execution of payment instructions during transfer of funds without account opening. They are applicable when a private individual or an individual entrepreneur makes payment via the cash desk of a bank or a financial company without a separate account or from a personal card. The changes introduced provide an opportunity to specify the actual payer in the payment document, even if somebody else pays the taxes.
Note. Effective from March З, 2026, the name of an LLC or its EDROU code, rather than the actual payer (director, accountant) as it was before, should be specified in the payment instruction if taxes are paid for the company by a private individual.
Based on the above said, if taxes are paid for the LLC by its director from a personal card, the following should be specified in the payment instruction:
- Payer: director’s surname, name and patronymic (e.g.: P.P. Petrenko);
- Payer’s code: director’s tax ID (e.g.: 0123456789);
- Actual payer: name of the LLC (e.g. Vchynok LLC);
- Actual payer’s code: EDRPOU code of the LLC (e.g. 12345678);
- Purpose of payment: the tax paid, period and name of the business entity for whom the tax is paid (e.g.: 101; profit tax for 2025 from Vchynok LLC; EDRPOU code 12345678).
Return of funds to the payer
Documents should be executed correctly to make a refund to the director (or to the accountant). The director must file an advance expense report and attach documents evidencing the payment of a tax (the originals of bank receipts of tax payment and the commission fee payment).
The director specifies the amount of taxes paid and the commission fee in the advance expense report. The graphs intended to reflect the amounts of the advance received are left blank because the director did not get any advance. Such a report must be filed by the end of the month in which the tax was paid (sub-paragraph 170.9.3 of article 170 of the Tax Code of Ukraine).
An individual entrepreneur paying from a private individual’s card
Yes, an individual entrepreneur can pay taxes from both a business account and a personal card as a private individual. Tax experts agree that it is possible, citing the provisions of the Tax Code of Ukraine. They specify the following in their consultations: “Private individuals responsible for payment of taxes and charges under the Tax Code of Ukraine (item 15.1 of article 15 of the Tax Code of Ukraine) are recognized as payers of taxes. Any own funds, including those received from sales of goods (work, services) and other sources, can be used for payment of cash obligations. Exceptions are provided only for payment of the VAT”.
A private individual opens separate accounts for entrepreneurship or professional activities or for own needs. However, pursuant to the provisions of item 4, section ІІ of the Regulation on cash transactions in the domestic currency of Ukraine: business entities that opened accounts with banks and store their funds in such accounts, can make settlements under their cash obligations arising in business relationships in cashless form, as well as in cash form, under the procedure established by the legislation of Ukraine.
This means that an individual entrepreneur can use any own funds for payment of obligations to the state or to pay tax debt. Payment can be made either in cash at a cash desk, or from a private individual’s bank card.
New requirements regarding the purpose of payments
A number of changes were implemented in documentation of payments made by entrepreneurs and private individuals. They lead to the strengthening of financial monitoring: banks and tax authorities will analyze each payment much more thoroughly in terms of its purpose.
It is not so critical if individual entrepreneurs pay taxes from their business accounts. It is sufficient to specify the code of payment type, tax type and period in the purpose of payment, just as before. For example: “*101; the Single Tax for quarter 1, 2026”. If payment is made via a cash desk, a terminal, or from a private individual’s personal card, as it was mentioned earlier, the following should be specified in the purpose of payment:
- Code of payment type;
- Type of tax;
- Period for which payment is made;
- Payer or on whose behalf payment is made;
- Payer’s code.
For example: “*101; the single tax for March 2026; the individual entrepreneur I. Ivanenko; tax ID 0123456789”.
Errors in payment instructions
If an error was found in the tax name (for example, the “single social contribution” is specified instead of the “single tax”), or in the period of payment, or incorrect information was specified in the purpose of payment between counterparties, it will not be possible to change the purpose of payment via the bank. However, you should not worry as it is not critical now. If all other details are correct, the payment amount will be shown correctly in the integrated card of a taxpayer and will not lead to tax debt.
And if an individual entrepreneur’s name and tax ID are not specified in the purpose of payment during payment of taxes via the bank’s cash desk, or the wrong individual entrepreneur’s name was specified, or only the payer’s name (e.g. an accountant) was recorded, this means that the tax paid will not be credited to the actual payer. And this error can and must be corrected! For this purpose, a letter in a free form should be sent to the tax inspectorate, with a request that the purpose of payment be changed. Such a letter can be sent via the taxpayer portal, the section “Correspondence with the STS”. In general, incorrect purpose of payment does not lead to liability.
Other Highlights
The changes introduced in March also concern the filling of payment instructions for counterparties, especially with regard to the “Purpose of payment” mentioned earlier. In 2026, the tax authority and the State Financial Monitoring Service of Ukraine will pay special attention to the information specified there. This can be:
· The type of goods or services you pay for.
· Basis for payment – a reference to an invoice or a contract (number and date).
· Inclusive of VAT or exclusive of VAT.
If a payment is made from a settlement account, the wording will be more concise: “Payment for design services based on invoice No. 15/03 of 15.03.2026, exclusive of VAT”.
If payment is made via a bank’s cash desk, a terminal, a private individual’s account, complete information on the payer must be provided: “Payment for printing the A1 poster, 10 copies, under the Agreement on Marketing Services No. 10 of 02.01.2026. Exclusive of VAT. The payer: the individual entrepreneur G. Tserkovna, EDRPOU code 2134528023”. Such a wording contains all the necessary information for accounting.
Note. Currently, the State Tax Inspectorate is closely monitoring whether reported income matches the registered KVED codes. And the inspectors look at the purpose of payment first of all.
If details are not specified in the purpose (e.g. “Payment for Services” or “Payment for Goods” is mentioned without specific details), or if general, short wordings are provided (e.g. “repair” instead of “repair of a service vehicle”), or information is not related to your type of activity at all, the tax inspectorate may consider that the source of income is other than permitted activities. In such an event, tough corrective measures can be applied.
Natalia Shcherbak, accounting and tax consultant