What will change for entrepreneurs in 2026
The state budget of 2026, which was recently adopted, approves the new tax thresholds and rates. They will affect individual entrepreneurs’ operations next year. Let’s consider the changes for entrepreneurs and also remind you about general operational conditions.
First of all, attention should be paid to the following. From January 1, 2026, minimum wages (MW) will increase from UAH 8,000 to UAH 8,647, or from UAH 48 to UAH 52 per hour. All the amounts calculated based on the minimum wages will increase respectively.
· For entrepreneurs paying the single tax, the income amount will increase. It will amount to:
For the 1st group – UAH 1,444,049 (167 х UAH 8,647);
For the 2nd group – UAH 7,211,598 (834 х UAH 8,647);
For the 3rd group – UAH 10,091,049 (1,167 х UAH 8,647).
· The maximum assessment base for the Single Social Contribution (SSC) will increase for all the individual entrepreneurs. It will amount to UAH 172,940 (UAH 8,647 х 20 MW), therefore, the minimum and the maximum SSC amount per month will increase as well. The minimum SSC will be UAH 1,902.34 (UAH 8,647 х 22%), while the maximum SSC will be UAH 38,046.80 (UAH 172,940 х 22%).
· For the 2nd group, the maximum amount of the single tax will increase and will be UAH 1,729.40 (UAH 8,647 х 20%).
· The war levy amount will be higher for the single tax payers of the 1st and the 2nd group at UAH 864.70 (UAH 8,647 х 10%).
· The employers will have to pay the salary of at least UAH 8,647 to their employees.
Penalties for violation of labour law will be much higher:
- The fine for every undeclared employee or payment of wages without the SSC accrual will be UAH 86,470;
- An entrepreneur breaching the terms for the payment of wages will be liable to a fine of UAH 25,941;
- The fine for a failure to comply with the minimum social guarantees related to remuneration is UAH 17,294;
- Breaches of other requirements of the labour law entail the fine of UAH 8,647 per a breach.
The minimum substinence level (MSL) will increase to UAH 3,328 for employable persons. This, in its turn, will lead to an increase of the tax amounts connected with its size. In particular:
- The maximum rate of the single tax for private entrepreneurs of the 1st group will increase and will amount to UAH 332.80 (UAH 3,328 х 10%);
The one-time payment for the issue of licenses will increase, as it is payable in the amount of one MSL for employable persons, which is in effect as of the date of the licensing authority’s decision on the license issue unless a different amount of payment is required under the law. The payment will be UAH 3,328 from January 1, 2026;
- The social tax deduction will be UAH 1,664 (UAH 3,328 х 0.5) and it may be applied to the income of up to UAH 4,660 inclusive (≈ UAH 3,328 × 1.4), considering the rounding to the nearest UAH 10 under paragraph 169.4.1 of article 164 of the Tax Code of Ukraine.
The sick pay limit will change. An increase of the MW will lead to higher sick pay and maternity pay limits per calendar day for insured persons. If the person’s insurance record is less than six months, the daily limit of sick pay due to temporary incapacity for work will amount to UAH 284.07 (UAH 8,647 ÷ 30.44), the daily limits of maternity pay: the minimum is UAH 284.07 (UAH 8,647 ÷ 30.44), while the maximum is UAH 568.13 (2 MW × UAH 8,647 ÷ 30.44). In the event that the insurance record is six months plus, respectively: the daily limit of pay due to temporary incapacity for work is UAH 568.13 (8,647 × 2 MW ÷ 30.44), the daily limits of maternity pay: the minimum is UAH 284.07 (8,647 ÷ 30.44), the maximum is UAH 5,680.13 (UAH 8,647 × 20 MW ÷ 30.44). The employers must take this into account when calculating sick pay.
Quarterly reporting will be the standard for all the groups
Effective from January 1, 2026, the procedure for the filing of tax calculation reports (combined tax reports) will change: quarterly reports will be implemented instead of monthly reports (the Law of Ukraine No. 4536-ІХ of 16.07.2025). This means that tax calculation reports will only be submitted if the actual payments to employees or counterparties were made, while the actual period of filing will be 40 calendar days after the end of the quarter.
Important information. Monthly reports must still be submitted for December 2025 not later than on January 20, 2026, while the reports for Q 1 must be submitted within 40 calendar days, meaning not later than May 10, 2026.
KVED replacement process will start. Ukraine is switching to the new classification standard of the types of business. The old KVED-2010 will be replaced with the new system based on the European standards. The classification of the types of business (NACE 2.1-UA), which will be applied since 2027, was approved by the order of the State Statistics Committee No. 191 of 28.10.2025. During 2026, both standards will be applied at the same time: the old KVED-2010 and the new NACE-2026. This means that individual entrepreneurs can switch to the new classifier of business types (introduce changes in registration documents) any time during 2026. This is mandatory as the single tax payers receiving income from the business type whose code is not listed in the Register of single tax payers may result in the cancellation of the right to work under a simplified taxation system.
Kindly pay attention that the replacement of KVED codes is a statistical change, and not a tax change. New NACE codes will not affect the tax rates or the taxation system directly. They are used for the purposes of statistics, reporting, licensing and classifying types of business. However, questions may arise regarding a non-compliant or an obsolete code during audits or reporting. Although those codes remain four-digit ones, they are aligned with the EU standards. The numbers of the KVED codes currently in use, however, may be changed, as certain types of business will be reclassified.
“To do” list for 2026:
- Trace when the respective interim tables from the State Statistics Committee will be released;
- Redefine the core business and the additional types of business under the classifier NACE 2.1-UA;
- Check your codes for compliance, and seek advice of the State Statistics Committee if any questions remain open;
- Introduce changes to your documents containing references to KVED-2010 codes and replace them with new ones;
- Amend KVED codes in all the registers where such codes are specified (with the State Registrar, the tax authorities, the Pension Fund of Ukraine, the statistics authority, etc.);
- Introduce changes to your licenses (if any) by filing the respective documents to the licensing authorities.
Please also note that the entrepreneurs that will be registered in 2027 must use the NACE 2.1-UA codes only.
Information to the attention of the single tax payers of the 1st group
From January 1, 2026, the requirement to use payment terminals for settlements with buyers (customers) will be in effect. However, unlike in the case of other individual entrepreneurs, the availability of cash registers/software-based cash-register systems will not be required as the provisions of subparagraph 296.10, article 296 of the Tax Code of Ukraine will remain unchanged for now. If an entrepreneur does not use physical or software-based cash register systems, this does not mean that further operations without installing payment terminals are possible. Actually, the absence of payment terminals leads to hefty fines under several provisions at a time, the most important being the following:
· Based on the provisions of article 163-15 of the Code of Administrative Violations of Ukraine, a breach of the procedure for cash settlements for goods (services), including an excess of cash settlement limits, a failure to comply with legislative requirements as regards enabling settlements for goods (services) using electronic payment means, will result in a fine for an individual entrepreneur or a legal entity. Such a fine will amount to 100 to 200 times non-taxable minimum individual income (ntmii), in particular, from UAH 1,700 to UAH 3,400. A repeated breach will lead to a fine of 500 to 1000 times ntmii (from UAH 8,500 to UAH 17,000).
· Based on paragraph 12 of article 23 of the Law of Ukraine No. 1023-XII of 12.05.1991, On Consumer Protection, in the event of breaching the law on consumer protection, business entities operating in sales and other types of services shall be held liable for a restriction or denying the exercise of consumer rights stipulated by article 17 of that Law. The amount of fine then will be 500 ntmii (UAH 8,500).
Natalia Shcherbak, tax and accounting consultant