Submission of annual reports of individual entrepreneurs: rules and deadlines

Who must file an annual report for a sole proprietorship?

Entrepreneurial activity in Ukraine involves not only doing business, but also fulfilling legal obligations to the state. One of these obligations is submitting annual reports. Regardless of whether the entrepreneur received a profit or temporarily did not carry out activities, the annual report is a mandatory component of tax control. This is a document that confirms that the entrepreneur kept records, controlled income, made timely accruals, and made the necessary payments.

Who submits the annual report?

The list of entrepreneurs who must submit reports each year includes:

• Individual entrepreneurs of group 1 – regardless of whether they worked or had a hryvnia of income.
• Individual entrepreneurs of group 2 – report in a simplified form, but with mandatory submission of a declaration.
• Individual entrepreneurs of group 3 – submit a declaration once a year or once a quarter (if provided for), but the final form is mandatory.
• Individual entrepreneurs on the general system – submit the most extensive package of documents, including an accounting book and expense reports.

Filing annual reports for individual entrepreneurs is not a formality, but part of the state control system. It allows you to check the correctness of calculations, compliance with legislation, the correctness of the tax burden, and the avoidance of shadow turnover.

What is the difference between the groups?

Different reporting forms are provided for different groups, as the taxation system differs in structure:

• Group 1 pays a fixed amount, so the declaration mainly indicates the total period of activity and the minimum indicators.
• Group 2 is required to indicate actual income for the year, even if the activity was minimal.
• Group 3 pays tax as a percentage, so the key information is the amount of income received.
• The general system requires the indication of both income and expenses, with mandatory documentary confirmation, to determine the financial result.

Below is an expanded comparison table for better navigation.

Comparative table of individual entrepreneur groups

Deadlines for submitting annual reports for individual entrepreneurs

It is important to correctly determine the deadline for filing declarations, as failure to meet the deadlines entails fines and requirements for additional inspections. The deadlines depend on the payer’s group, type of taxation, and reporting form.

General rules for individual entrepreneurs of groups 1–3

For entrepreneurs on the single tax, the same principle is established: the declaration for the year is submitted in the first quarter of the following year. In most cases, the submission of annual reports for individual entrepreneurs must take place by March 1.
This date is the same for all groups of the single tax, unless the legislation provides for other mandatory changes.
This means that the annual report of an individual entrepreneur (of any group of the simplified system) must be sent via the electronic account or the tax service on time. A delay of even one day can lead to financial sanctions.

For sole proprietors on the general system

Entrepreneurs on the general system submit an annual declaration within a longer period than sole proprietors:

• income declaration by May 1 of the following year;
• EUC until February 10.

Since the general system involves a more complex accounting structure, it is important to have updated registers, an archive of documents, and to keep a proper accounting book.

Regarding the EUC

Annual reporting on the single social contribution for individual entrepreneurs is submitted by all entrepreneurs, even if no activity has been carried out. That is, regardless of the group or taxation system, a report on the single social contribution must be submitted.

Consequences of violation of deadlines

Violation of reporting deadlines may lead to:

• fines;
• pennies;
• additional checks;
• blocking electronic document flow;
• inability to change the group or close the individual entrepreneur.

This can create significant difficulties, especially if the entrepreneur wants to smoothly terminate the activity or switch to another tax category.

Annual reporting of individual entrepreneurs by groups

Annual reporting of the individual entrepreneurs group 1

Group 1 entrepreneurs have the simplest reporting model. However, this does not mean that you can neglect the details, because even a minimal error can lead to tax authorities demanding explanations or re-submission.
What forms need to be submitted?

• declaration of a single taxpayer of group 1;
• annual report on the EUS.

Do I need to file a report with the Unified Social Security Administration?
Yes. Entrepreneurs are required to submit a report on the Unified Social Security System regardless of their activity.
Examples of situations

1. The individual entrepreneur worked part-time – the declaration is filled out for the months in which the registration took place.
2. The individual entrepreneur had no income – the report is zero, but it must be submitted.
3. The entrepreneur changed the group; separate reports are submitted for different periods.

Annual reporting of the individual entrepreneurs group 2

Taxpayers of group 2 work with a fixed single tax rate, but they submit reports in full.
What is included in the annual report of an individual entrepreneur group 2

• declaration of unity;
• ECV;
• confirmation of tax payment (bank receipts).

Declaration, EP, EUC

• EP is paid monthly.
• The EUC is paid quarterly or annually in full.
• The declaration must confirm the compliance of income.

Annual reporting of the individual entrepreneurs group 3

The third group is the most flexible, but also the most error-prone, as it works with a percentage of turnover. Any incorrect amount can affect tax liabilities.
VAT/excluding VAT
VAT payers must submit:

• VAT declarations;
• annual declaration of the sole proprietor;
• EUC.

Without VAT, reporting is simpler.
EP and EUC

• EP is paid from turnover: 3% or 5%.
• EUC – regardless of activity.
• Declaration – indicates all amounts of income received.

Quarterly and annual form
Even if an entrepreneur submitted quarterly declarations, the annual report of an individual entrepreneur remains mandatory – this is the final form of reporting.

Annual reporting of individual entrepreneurs on the common system

Entrepreneurs on the general system have the most complex reporting model. They must keep a book of income and expenses, properly store all documents, and confirm financial indicators.

Declaration of income and expenses

The declaration states independently:

• the amount of income;
• documented expenses;
• profit;
• tax base.

Accounting book

This is a document that should reflect all transactions during the year. The tax office may request it during an audit.

EUC

Submission of a report with the EUS is mandatory.
Special cases

• work through the PRO;
• using multiple bank accounts;
• import and export of goods;
• transactions with agency agreements.

How to submit annual reports via your electronic account

Today, annual reporting for individual entrepreneurs is most often submitted through the taxpayer’s electronic account, as this is the most convenient method.

Step-by-step instructions

1. Log in to your account

Authorization is carried out via KEP, BankID or other methods.

1. Choose the desired shape

The system automatically displays the available forms for your group.

1. Fill out the form

Carefully enter:

• income data;
• payer details;
• required indicators;
• information about taxes.

1. Sign the CEP

Without a digital signature, the declaration has no legal force.

1. Send

After that, the system issues receipt No. 1.

1. Wait for receipt No. 2

This is confirmation that the report has been accepted.
Common mistakes

• Incorrectly selected period.
• Errors in the numbers.
• The declaration is not signed by the CEP.
• The wrong form was submitted.
• Service problems or shipping failures.

What to do after submitting the annual report?

Check the status in the account

In the documents section, you can see whether the tax office has accepted your report.

How to keep copies of documents

It is recommended to keep copies at:

• electronic archive;
• on the computer;
• in cloud storage.

Penalties for failure to submit or violation of deadlines

Fines are applied in cases of:

• untimely submission of the declaration;
• submission of incorrect data;
• zero activity without submitting a report;
• errors in indicators.

You can avoid sanctions if:

• adhere to deadlines;
• keep all receipts;
• Check the office regularly.