Taxation of Enterprises
Are you starting your own business or already actively working? Congratulations! There are many interesting things ahead, but there is one aspect that cannot be ignored – taxes. A correctly configured tax system is not just a legal requirement, but your financial peace of mind and reliable protection against risks. The team at “BuhalteriO” law firm is here to help you navigate this path easily and without stress, understanding all the legislative intricacies.
General or Simplified? Making the Main Tax Choice
So, the first key decision your business faces is choosing a tax system. Essentially, there are two main paths: the general system or the simplified system, better known as the single tax. Each option has its pros and cons, so what is ideal for a coffee shop may not be suitable for a large IT company at all.
To make it easier to understand, we have compiled the main differences into a convenient table to help you get your bearings.
| Characteristic | General System | Simplified System (Single Tax) |
| What do we pay tax on? | On net profit (income minus documented expenses) | On the total amount of income (revenue) |
| What is the rate? | 18% of profit, plus VAT if you are a payer | A small percentage of income or a fixed amount (depends on the group) |
| Are there restrictions? | Practically none: work with any income and number of people | Yes, there are limits on income, number of employees, and types of activities |
| How complex is the accounting? | Very detailed and complex, requires a professional accountant | Significantly simpler, less paperwork |
As you can see, the devil is in the details, so choosing at random is definitely not a good idea. We at “BuhalteriO” are ready to deeply analyze your specific situation: we will calculate potential income and expenses, take into account the specifics of your activities, and advise on which option will be the most profitable for your enterprise in the long run.
What Taxes Will You Have to Deal With?
Regardless of the chosen system, there is a basic set of taxes and fees that every entrepreneur should know about. Let’s briefly go over each one so you understand what’s what and don’t get confused by these complex abbreviations.
Here is your main list:
- Profit Tax: If you are on the general system, be prepared to give the state 18% of your company’s net profit.
- VAT (Value Added Tax): This indirect tax applies to most businesses that sell goods or services. Its payment can be either mandatory or voluntary.
- Single Tax (ST): This is a gift for those on the simplified system, as it replaces several payments at once and significantly simplifies life.
- Payroll Taxes: Have employees? Then you need to withhold 18% PIT (Personal Income Tax) and 1.5% military levy from their salaries.
- USC (Unified Social Contribution): This is not exactly a tax, but a contribution to pension and social funds. You accrue it “on top” of each employee’s salary at a rate of 22%.
Does it seem like a lot? It is. But the good news is that you don’t have to keep all this in your head. Our job is to ensure the correctness of all calculations and timely payments so you can calmly focus on developing your business.
Tax Nuances for Your Industry
Ukrainian legislation is structured in such a way that tax rules can vary greatly depending on what exactly you do. What is relevant for a farmer does not concern the owner of a pharmacy chain at all. Therefore, it is important to know the specifics of your market.
We have experience working with completely different spheres, so we can highlight a few examples:
- For trade, it is critically important to maintain proper inventory records, work with cash registers (RRO/PRRO), and understand customs payments for imports.
- For agriculture, there is a favorable Group 4 of the single tax, but at the same time, there are complexities with land accounting and seasonality.
- For pharmacies, a special VAT rate of 7% applies to medicines, as well as strict licensing requirements, which also affects accounting.
- For industrial enterprises, the most difficult aspect is usually accounting for equipment depreciation and the correct allocation of production costs to calculate profit tax.
We at “BuhalteriO” don’t just know the Tax Code. We understand how its norms work in practice for trade, manufacturing, the agricultural sector, or the service industry. This experience allows us to find the best and safest tax solutions specifically for you.
Reporting and Auditing: How to Sleep Soundly and Not Fear Inspections
Submitting reports on time and without errors is a must-have for any business, especially on the general system. But how can you be sure that everything is correct down to the last comma? This is where a tax audit comes in. It’s like a medical check-up for your business: we thoroughly check all your reports, find potential “weak spots,” and help you fix them before the tax authorities take an interest.
Time to Delegate Tax Worries to Professionals
Taxes are complicated, and that’s perfectly normal. You don’t need to become a tax expert to run a successful business. Your strength is in your product or service. Our strength is in protecting your business from a legal and financial standpoint.
The “BuhalteriO” team is ready to take on your tax worries. We will:
- Help you choose the most advantageous tax system.
- Conduct a full audit of your reporting to identify and correct risks.
- Find legal ways to reduce the tax burden.
- Prepare and timely submit all necessary reports.
- Protect your interests if you have a tax inspection.
Don’t postpone your peace of mind. Call or write to us to discuss your situation. The very first conversation will help you see a clear and understandable action plan.