Microenterprise tax

• The micro business tax rate on revenue is 25%
• The microenterprise tax payment scheme is not available to value-added tax (VAT) payers.
• Expenses cannot be deducted from income.
• Starting from 1 January 2024, micro-enterprise tax payers who also have employment income subject to personal income tax will be eligible to applying the non-taxable minimum and allowances for dependents (until 2024, these options were restricted by the by the limitations of the "Law on Personal Income Tax” ").

Individual income tax

• The individual income tax payment scheme involves mandatory payment of individual income tax and mandatory contributions to state social insurance from income generated through economic activity, i.e., profits.
• The individual income tax rate is applied depending on income during the tax year, based on the individual income tax rate ranging from 20% to 31%.
• Social contributions are calculated based on the standard rate, amounting to 31.07% of at least the minimum wage (620 euros). Additionally, for the difference between income and the minimum wage (620 euros), mandatory contributions to state social insurance at a rate of 10% for pension insurance must be paid.
• If income does not reach the minimum wage, i.e., 620 euros, then only the 10% pension insurance contribution is payable.
• Every quarter, by the 17th day of the month following that quarter, self-employed must submit reports, and by the 23rd day of the same month, the applicable taxes must be paid.
• When applying the individual income tax, all the exemptions provided for in the individual income tax law are preserved.
• An individual can choose the individual income tax payment scheme by registering under any of the following forms of business activity registration: individual entrepreneur or merchant, farmer or owner of a fishery, or by registering with the State Revenue Service as a person engaged in economic activity, i.e., a self-employed individual.
• As of July 1, 2021, recipients of copyright royalties, when choosing to register their business activity, retain the option to apply a conditional expense rate of 25% or 50%.

Enterprise income tax

• The enterprise income tax regime involves applying a 20% tax rate to that portion of profits that is distributed as dividends or used for purposes not directly related to entrepreneurial activities.
• Dividends received by individuals from a company that is a payer of enterprise income tax are not subject to individual income tax.
• Enterprise income tax is paid if a legal entity is registered under any form of legal entity, such as a limited liability company, a small capital limited liability company, or a joint-stock company.
• When determining the taxable base for the application of the tax, the taxable object is divided by a coefficient of 0.8.
• If a company's monthly turnover exceeds the size of five minimum monthly wages and the company has no employees receiving compensation of at least the minimum monthly wage, then the members of the management board are subject to a salary tax based on the minimum wage.

*You need to register as a value-added tax (VAT) payer if:

• You receive services from a taxpayer in the European Union or third countries (with exceptions).
• You provide services to a taxpayer in the European Union.
• during the previous 12 months, the amount of transactions subject to VAT ≥ 50,000 euros;
• The cost of goods purchased within the European Union during the calendar year was ≥ 10,000 euros.

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