ua en ru

Ukrainians face significant fines from October - All the details

Ukrainians face significant fines from October - All the details Starting from October 1, significant fines are being reintroduced for businesses (photo: Vitalii Nosach/RBC-Ukraine)

Fines for trading without cash registers are being reinstated from October 1, 2023. Ukrainians are warned that these fines will be substantial.

RBC-Ukraine provides information on who is at risk of fines and how much they will have to pay.

Fines are coming back

This week, the head of the Financial Committee of the Verkhovna Rada, Danylo Hetmantsev, reminded about the return of fines that were canceled at the beginning of Russia's full-scale invasion. These fines will apply to entrepreneurs who operate without point-of-sale (POS) registers.

"I want to address trading companies regarding the installation of cash registers. From October 1, significant fines will be imposed for not installing these devices," he stated.

He also emphasized that planned business checks for the presence of cash registers have already been fully reinstated.

Who is subject to inspections

According to Hetsmantsev, inspections apply to certain groups, including those who sell:

  • alcoholic beverages
  • tobacco products
  • fuel
  • electricity.

In addition, planned inspections also apply to banking and financial institutions, as well as the gambling industry.

"We will soon adopt a plan for tax inspections, and by the end of the year, all businesses will be inspected," warned the Member of Parliament.

How much will need to be paid

If tax authorities find that the mentioned categories are not conducting cash transactions through cash registers, financial sanctions will be applied to them. The amount of these sanctions directly depends on the sum that bypassed the cash register.

  • For the first violation, a fine of 100% of the value of the goods (works, and services) sold is imposed
  • For each subsequent violation, a fine of 150% of the value of the goods (works, and services) sold with violations is applied

There is an exception

Fines for operating without cash registers will not be applied to businesses in the frontline territories. However, this does not apply to the sale of excisable goods.

Why fines are coming back

In June, the Verkhovna Rada passed bill #8401, which introduced changes to the Tax Code. President Volodymyr Zelenskyy signed it a few weeks later.

According to the document, starting from August 1, 2023, tax privileges were abolished, and checks on entrepreneurs were reinstated.

Specifically, the preferential 2% tax rate was abolished. Individual entrepreneurs were allowed to independently switch to their desired tax system. New individual entrepreneurs registered in 2022 were automatically switched to the single tax with a rate of 5%.

Additionally, Groups I and II were required to pay the single tax again, and the ban on fines for violations of tax legislation was also lifted.

The return of pre-war taxes, fines, and checks is one of the structural benchmarks of the agreement with the International Monetary Fund (IMF) for a financing program of $15.6 billion.

Who needs a cash register and who doesn't

The use of cash registers is mandatory for individual entrepreneurs (FOPs) in the II, III, and IV groups of the simplified tax system and under the general tax system, regardless of the type of activity and income volume.

FOPs in the I group are not required to use cash registers.

An important clarification is that compliance with the law requires the registration of a cash register with the supervisory authority.

The State Tax Service offers free POS software that can be installed on smartphones and tablets running on iOS and Android operating systems. Their updates and use do not require expenses or special skills.