Photo: What mistakes do sole proprietors make when filling out declarations (Getty Images) Author: Valeria Lukina
Sole proprietors can already file declarations for the first quarter of 2025. When preparing reports, errors may occur, each of which entails fines from the Tax Service.
What are the most typical mistakes in declarations and how to avoid them – read in the material of RBC-Ukraine.
Content:
- The most common mistakes in tax reporting
- How to avoid mistakes
The most common mistakes in tax reporting
Filing a declaration is one of the main responsibilities of every entrepreneur in Ukraine. But even experienced sole proprietors sometimes make mistakes that can cost a lot. Since 2025, control by tax authorities has increased, and fines have become more painful. Let's look at the five most common mistakes that can lead to financial sanctions.
Bohdan Yankiv, a lawyer and tax expert, noted that the most common mistake is made when calculating income . A common problem is confusion between income and income from non-entrepreneurial activities. If you have understated your income, then the penalty for this is an additional tax charge and a penalty for the entire period of understating income in accordance with Article 123.1 of the Tax Code on 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 in a commentary to RBC-Ukraine.
Bogdan Yankiv recommends that in order to correctly calculate income, you need to obtain statements from brokers, banks, exchanges or other documents that clearly show the payment receipts.
Photo: The most common mistakes when filing taxes (Getty Images)
Another common mistake is incorrectly indicating the KVEDs – filing reports with outdated or irrelevant codes for types of activity. This becomes the reason for fines or even the 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 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 of Ukraine obliges entrepreneurs to file declarations within strictly defined deadlines. Failure to file or being late with filing even by one day entails a fine of 340 hryvnia.
Repeated late filing of a declaration entails a fine of 1020 hryvnia in accordance with Article 120.1 of the Tax Code of Ukraine on the violation by the taxpayer of the procedure for submitting information.
Since 2025, sole proprietors of groups I, II and IV must pay military tax in the form of a monthly advance payment. Failure to include military tax in the declaration is also an error, a fine for which is provided for in Article 126.1 of the Tax Code of Ukraine Violation of the rules for payment (transfer) of taxes.
The expert also draws attention to the fact that the declaration must include all mandatory fields: types of activities, income amount, amount of tax accrued, amount of single social contribution, signature and date. Often, individual entrepreneurs submit an empty (zero) or incomplete declaration , not conducting any activity, but do not have the right to be exempt from paying single social contribution. This entails the imposition of a fine, 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,” Bohdan Yankiv 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.
In order to minimize the likelihood of errors in your tax return, you should:
- 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 frequently;
- check KVEDs 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 become stricter, and mandatory payments have expanded. Timely filing and accuracy are the key to an entrepreneur's peace of mind.
Let us recall that in Ukraine it is possible to apply once a year to change the simplified taxation system group for single tax payers. In the RBC-Ukraine material about cases when it is possible to switch to another simplified taxation system group.
From January 1, 2025, individual entrepreneurs will begin to pay military tax and mandatory payment of the unified social tax will be restored according to new rules; what is now known regarding dates and deadlines is in the RBC-Ukraine material.
In preparation, we used materials from the State Tax Service of Ukraine and explanations of the norms of the Tax Code of Ukraine from the portal Kodeksy.com.ua and comments from lawyer and tax expert Bohdan Yankiv.