Dropshipping in Ukraine is a fully legal business model, provided it is properly structured. Ukrainian legislation contains no separate provision for this type of activity, but clearly regulates it through the general provisions of the Civil and Tax Codes. The form of registration, the taxation system, and the type of agreement with the supplier are three decisions on which the legality and profitability of a dropshipping business depend.

Dropshipping and Ukraine’s Legal Framework: What You Need to Know

Dropshipping falls under the general norms of commercial and civil law. The key criterion is the entrepreneur’s role in the transaction chain: they act either as a seller of goods in their own name, or as an intermediary (agent or commission agent). This role determines the tax base and the scope of liability to the buyer.

Operating without registration violates Article 164 of the Code of Ukraine on Administrative Offences and entails a fine with possible confiscation of income. In addition, banks are required to conduct financial monitoring: regular incoming payments to an individual’s account without supporting documentation lead to account blocking. Registering as a sole proprietor (FOP) is a one-time action that eliminates both risks simultaneously.

How a Dropshipper Registers as a Sole Proprietor: First Steps

FOP registration is available online through the Diia portal or in person at a CNAP service centre. A passport and tax identification number (TIN) are required, along with a qualified electronic signature (QES) for remote submission.

Before submitting documents, the entrepreneur selects activity codes (KVEDs) and a unified tax group. For dropshipping, two main codes are relevant:

  • KVED 47.91 — retail trade via the internet (if the dropshipper acts as the seller)
  • KVED 46.19 — agents in trade of a mixed range of goods (if the dropshipper is an intermediary)
  • KVED 73.11 or 63.11 — as additional codes, depending on the nature of the activity

An incorrect choice of KVED results in fines during inspections. Therefore, KVEDs should be aligned with the actual business model before the first sale.

FOP or LLC: What to Choose for Dropshipping

Most beginner dropshippers choose a sole proprietorship — due to the simplicity of registration and minimal administrative burden. An LLC is justified only with significant turnover or when there is a need to attract investors.

CriterionFOPLLC
Registration1 day, online3–5 days, more documents
Taxation systemUnified tax (simplified)General system (mandatory)
AccountingSimplifiedFull (mandatory)
Suitable forSmall and medium businessLarge turnover, partnerships

A sole proprietorship on the simplified system is the optimal starting point for dropshipping. At the same time, turnover growth beyond the group limit requires a timely transition or change of business form.

Which Unified Tax Group Should a Dropshipper Choose

The choice between Group 2 and Group 3 of the unified tax depends on the payment model and contractual arrangement. Below are four key comparison parameters:

  • Group 2 UT — suitable if the dropshipper receives payment directly from the buyer as a seller; fixed rate ~1,420 UAH/month + single social contribution (SSC); income limit ~5.9 million UAH/year; reporting once a year
  • Group 3 UT — suitable if the dropshipper receives a commission or agency fee; rate of 5% of income (excluding VAT) or 3% (including VAT); limit ~8.3 million UAH/year; reporting quarterly
  • Group 2 + intermediary agreement with a non-unified-tax payer — a prohibited combination; results in removal from the group
  • General system — applied when limits are exceeded; rate of 18% personal income tax + 1.5% military levy on net income

Choosing the right group is not a technical detail — it is direct management of the tax burden. A mistake at the outset results in additional tax assessments and fines.

KVED and Contract: The Legal Foundation of Dropshipping

The agreement with the supplier determines not only the commercial terms but also the legal model of the entire activity. The type of agreement determines what constitutes the tax base — the full sale amount or only the intermediary’s fee.

Agency Agreement or Commission Agreement: A Fundamental Difference

Legislation does not provide for a separate “dropshipping agreement,” so entrepreneurs choose one of three options:

  • Commission agreement (Art. 1011–1028 of the Civil Code of Ukraine) — the dropshipper concludes transactions with buyers in their own name but at the supplier’s expense; tax base — commission fee only; the most common option for Group 3 UT
  • Agency agreement — the dropshipper acts on behalf of the supplier; suitable for certain arrangements, but limits independence in pricing
  • Purchase and sale agreement — the dropshipper acts as a full seller; tax base — total amount of receipts; the typical option for Group 2 UT

A public offer on the website or marketplace is also a mandatory element — it governs the relationship between the dropshipper and the end buyer.

Cash Register Equipment and Accounting: What a Dropshipper-FOP Is Required to Do

The fact of accepting payment from the buyer is the sole criterion that determines the obligation to use fiscal registration equipment. If the dropshipper receives funds via acquiring, LiqPay, WayForPay, or cash on delivery — they are required to use a cash register (RRO) or a software-based fiscal solution (PRRO). The delivery method and who physically ships the parcel are irrelevant.

Regarding inventory accounting: Procedure No. 496 applies to sole proprietors who actually carry out the sale of goods. A dropshipper operating exclusively as an intermediary without ownership of the goods is exempt from this obligation. However, a properly structured contractual model is a mandatory condition for such an exemption.

Accounting Support for Dropshipping from BuhalteriO

FOP registration, selection of the unified tax group, alignment of KVEDs, preparation of the supplier agreement, and connection of fiscal equipment — each of these steps requires precision. A mistake at any stage results in additional tax assessments, fines, or account blocking.

BuhalteriO supports dropshippers from registration through quarterly reporting. Order services for sole proprietors—and your business will be fully compliant from day one.

Frequently Asked Questions About Dropshipping in Ukraine

Is Dropshipping in Ukraine Legal Without FOP Registration?

Dropshipping in Ukraine is legal, but operating without registration constitutes an administrative offence under Article 164 of the Code of Ukraine on Administrative Offences. FOP registration takes one day and permanently eliminates all legal risks associated with the activity.

Which Unified Tax Group Should a Beginner Dropshipper Choose?

A dropshipper who accepts payment directly from the buyer chooses Group 2 of the unified tax with a fixed monthly rate. If the entrepreneur works as an intermediary and receives a commission — the optimal choice is Group 3 of the unified tax.

Does a Dropshipper Need a Cash Register When Payment Is Made by Card?

The fact of accepting payment from the buyer via acquiring obligates the dropshipper to use an RRO or software-based PRRO. This rule applies regardless of who physically ships the goods — the dropshipper or the supplier.