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How to pay a flat tax correctly

What is a flat tax, how much it is for each of the groups of individual entrepreneurs, and how to pay a flat tax online?

The flat tax payment is a mandatory payment for entrepreneurs who conduct official activities in Ukraine.  The flat tax is the amount of money that a registered person (business entity) pays to the local treasury under a simplified taxation system.  It is determined as a percentage of income and depends on the payer group.

 Individual entrepreneurs can choose a group while registration and, accordingly, pay a flat tax on it.

A flat tax 1st group – how much to pay?

Firstly, entrepreneurs of the 1st group pay tax on a monthly basis (as opposed to the 3rd one).  And you have to make the payment before the 20th of the current month.  Secondly, the amount of the single tax is fixed and does not change during the year.  Thirdly, it must be paid including for the months when there was no income.  The single tax rate of the 1st group is up to 10% of the subsistence minimum – UAH 210.2 / month in 2020.

A flat tax 2nd group

How much should an entrepreneur pay if he is in the 2nd group?  Unlike the 1st, the flat tax rate of the 2nd group is up to 20% of the minimum wage (4723 UAH).  The single tax is equal to UAH 944.6 / month and the payment period is the same as for the 1st group, until the 20th of the current month.  You can pay the flat tax immediately before the end of the year.

For both groups, the rate depends on the activities and is set by local councils.  If the entrepreneur did not manage to pay the flat tax on time, then a fine of 50% is imposed on him.  Plus a penalty for each day of delay from the first business day after the due date until the date of payment of the debt and the fine. For the 1st and 2nd group of entrepreneurs without employees, there are tax holidays, which once a year may not pay tax.

How to calculate a flat tax for the 3rd group

Entrepreneurs of the 3rd group pay tax once a quarter (and if there is an income) within 50 calendar days after the end of the quarter.  In the third group, the flat tax is paid not in a fixed amount, but depending on the amount of income received.

 So how much to pay a flat tax?  There are two options here: VAT payers and non-payers.  The flat tax in the first case is 3% of income + VAT, VAT non-payers have a rate of 5% of income.  If there is no income, there is no tax.  When doing business with a large and constant amount of expenses, the use of the third group is unprofitable.

How to pay a flat tax

 To pay a flat tax via the Internet, you need to use a simplified method – a service for accepting payments online.  Portmone.com makes it easy and quick:

  1. Go to the service catalog, select the section “Taxes, payments to the budget” and “Flat tax from individual entrepreneurs”.
  2. To make a payment, mark the “Region” and after that – the company-recipient of the payment from the drop-down list.
  3. By clicking on the type of group (1, 2, or 3), the system automatically pulls up the amount of the flat tax.
  4. Go to the payment – a page for entering payment data will open:
  • Payer’s full name, identification number, period, email, phone number, and amount of money.
  • Be sure to top up your card or current account to pay taxes

The online transfer commission is 2% (at least 4 UAH).  Funds for taxes will be transferred to the State Treasury Service of Ukraine within 3 working days (usually up to 24 hours).

 After the payment, we recommend you to save the template in your account, so that next time you can pay a flat tax in two clicks.

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