Sole proprietors already have the opportunity to file declarations for the first quarter of 2025. When preparing reports, errors may occur that lead to fines from the tax service. Lawyer and tax expert Bogdan Yankiv spoke about the most typical errors in declarations and how to avoid them, RBC-Ukraine reports.
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The most common mistakes
Yankiv noted that the most common mistake is incorrect calculation of income. One of the typical problems is confusion between income and receipts from non-entrepreneurial activities.
If you underreport your income, this may result in penalties, including additional tax and interest for the entire period of underreporting your income, in accordance with Section 123.1 of the Tax Code, which regulates penalties.
“In particular, this also concerns foreign income. It is necessary to take the exchange rate according to the NBU on the date of the expense or the received profit. If the exact date is unknown, then it is necessary to proceed from the rate on December 31 of the previous year,” the expert noted.
To calculate income correctly, he recommends obtaining statements from brokers, banks, stock exchanges or other documents that clearly reflect payment receipts. This will help avoid errors and ensure the correctness of tax reporting.
Another common mistake is incorrect indication of KVEDs – reporting on outdated or irrelevant codes of types of activity. This can lead to a fine or even loss of the right to a simplified taxation system.
In particular, when changing the direction of activity, it is necessary to make changes to the Unified State Register, otherwise the type of activity in the declaration will be considered invalid.
You can check the relevance of your KVED on the official website of the Unified State Register.
Common errors in tax reporting also include late filing of declarations. The Tax Code obliges entrepreneurs to file declarations within clearly defined deadlines. Failure to file or being late with filing even by one day is subject to a fine of 340 UAH.
Repeated late filing of a declaration entails a fine of 1020 hryvnia in accordance with Article 120.1 of the Tax Code of Ukraine, which provides for liability for the taxpayer’s violation of the procedure for submitting information.
Since 2025, individual entrepreneurs of groups I, II and IV must pay military tax in the form of a monthly advance payment. Failure to account for military tax in the declaration is an error for which a fine is provided in accordance with Article 126.1 of the Tax Code of Ukraine for violating the rules for paying (transferring) taxes.
The expert also draws attention to the fact that the declaration must include all mandatory fields: types of activities, income amount, amount of accrued tax, amount of single social contribution, signature and date.
Often, sole proprietors submit an empty (zero) or incomplete declaration, not conducting any activity, but do not have the right to be exempt from paying the unified social contribution. This results in a fine and loss of insurance experience in accordance with the law “On the collection and accounting of a single contribution for compulsory state social insurance.”
How to avoid mistakes
“The declaration is considered accepted if the taxpayer has receipt No. 2 from the tax office in his personal account,” Yankov noted.
This means that the declaration has been accepted, but usually this is only the beginning of the journey. Within 3 years after filing the declaration, the tax office may appoint an additional audit and request all income statements on the basis of which the calculation was made.
To minimize the likelihood of errors in your tax return, it is recommended that you:
- use the official taxpayer account to submit reports – most of the fields are filled in automatically; follow the news of the Tax Service – the rules change often; check the KVED and details before submitting reports; use the advice of tax consultants, specialized lawyers and accountants in particularly difficult situations.
Even one inaccuracy in the declaration can cause a chain of problems: from a fine to an audit. In 2025, sole proprietors should be especially careful – tax control has increased, and mandatory payments have expanded.
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