2025: A Pivotal Year for Small and Medium Businesses in Ukraine

The year 2025 became a milestone for small and medium-sized businesses in Ukraine: moratoriums on inspections were lifted, financial penalties became stricter, and new risk criteria for entrepreneurs were introduced. Individual entrepreneurs (FOPs) returned to the focus of oversight by the State Tax Service (STS) and other regulatory bodies. Knowledge of the main aspects of tax inspections has become essential to avoid financial losses, stress, and business stoppages.

Types of FOP Inspections

There are several main types of inspections applied to FOPs in 2025:

• Desk (cameral) audit— conducted automatically and without the entrepreneur’s participation, based on submitted declarations and reports. It checks the timeliness, completeness, and accuracy of tax payments.
• Actual inspection— an unexpected on-site check, which can occur at the place of business if there is suspicion of violations such as unregistered employees, calculation errors, or absence/incorrect use of cash registers (RRO/PRRO).
• Documentary inspection— scheduled or unscheduled, includes checking all primary, financial, and accounting documents of the entrepreneur.

Legislative Changes in 2025

Moratorium Lift

Until December 1, 2024, FOPs of groups 1–2 were under a moratorium on documentary inspections, but from this date and from January 1, 2025, for all other categories, the moratorium was lifted. This increased the number of inspections by 35% in 2025 compared to the previous year.

Legislative Innovations

• From March 1, 2025, new rules for the use of RRO/PRRO, the mandatory presence of POS terminals, and expanded responsibility for violations of labor and tax legislation came into force.
• Stricter financial sanctions for violations of settlement operations return as of August 1, 2025.

Who Inspects FOPs and for What?

The main body is the STS, but other agencies—such as the State Labour Service, State Consumer Service, State Environmental Inspectorate, and the State Emergency Service (for certain activities)—may also conduct their own inspections. The most common grounds for inspections include:

• Breach of turnover limits
• Operations without registration or with incorrect KVEDs
• Absence or improper use of RRO/PRRO
• Unregistered employees
• Systematic failure to submit reports
• Customer complaints or other external signals

How Are Inspection Schedules Formed?

The annual inspection schedule by the STS is published on its official website by December 25. The list includes entrepreneurs with increased tax risks based on several criteria: significant growth/drop in income, frequent changes in KVEDs, suspicious transactions with risky counterparts, many cash operations, tax debt, client complaints. You can check whether your FOP is on the schedule via your tax number.

List of Documents for Inspection

During an inspection, FOPs may be required to present:

• FOP registration documents
• Single tax or VAT certificates, if available
• Income ledger (or registers for the general system)
• Primary documents for the purchase of goods/materials, invoices, contracts
• Bank statements
• Employee documents: labor contracts, records of payment of social contributions and salaries
• For simplified system users — cash receipts, Z-reports, description of cash register software

The absence of documents or inconsistencies may be grounds for fines.

New Fines and Sanctions in 2025

For Cash Discipline and RRO

• Absence/incorrect use of RRO/PRRO: first case — 100% of the sale amount, second and subsequent — 150%
• Lack of ability to accept card payments (POS terminal): fine 1,700–17,000UAH, plus an additional 8,500UAH for refusing card servicing
• Providing services without conducting transactions through RRO: fine of 100% of the value of the goods or services

For Labor Violations

• Unregistered employee: 80,000–240,000UAH per each
• Registration of employees with violations: 8,500–34,000UAH
• Operating without FOP registration: 17,000–85,000UAH

For Failure to Submit or Errors in Reporting

• Ignoring a tax authority request: 8,000UAH or one minimum wage
• Late payment of the Unified Tax for groups 1–2: 50% of the tax rate

Inspection Specifics During Martial Law

In 2025, scheduled inspections are not conducted for FOPs registered in temporarily occupied or combat territories. Meanwhile, the STS actively conducts desk, actual, and unscheduled inspections in relatively “peaceful” regions. The rule remains: the lower the financial risk and the more transparent your activities, the less likely you are to be inspected.

Grounds and Features of Unscheduled Inspections

Unscheduled inspections are carried out in cases of:

• Detection of violations during cameral control
• Complaints or requests from citizens or business partners
• Signs of fictitious activity or tax evasion
• During liquidation or reorganization of an FOP

What Inspectors Pay Attention to

• Completeness and correctness of income, expense, and reporting records
• Timely payment of taxes, dues, and social contributions
• Legality of employment of personnel
• Use of RRO/PRRO, proper execution of settlement transactions
• Availability and preservation of primary documents
• Compliance of activities with registered KVEDs
• Observance of income limits by group

Common FOP Mistakes

• Operating without required cash registers
• Exceeding the income limit for their group or operating with unconfirmed KVEDs
• Unregistered labor relations or paying salaries in cash
• Missing primary documents, invoices, or bank statements
• Ignoring requests from regulatory authorities
• Delays/failure to submit reports

How to Avoid Risks and Problems During Inspection

• Regularly check your inclusion in the inspection schedule
• Strictly follow accounting requirements, submit reports, and pay taxes on time
• Always have and keep all primary documents and receipts for at least the last three years
• If you have employees, formalize their employment officially
• Use RRO/PRRO and POS terminals if required by law
• Respond promptly to tax authority requests, providing a full set of documents
• Consult with qualified accountants and lawyers in case of doubt

Conclusion

2025 was marked by significant changes in the state control system over FOP activities. Knowing your rights and obligations, detailed record keeping, and timely response to tax authority demands are the keys to business stability and protection. Failure to comply leads directly to painful financial losses and even suspension of business. Comply with the law, develop your literacy in accounting and taxation issues, and remain a successful entrepreneur even under the watchful eye of regulatory bodies.

Author: Yulia Popadyn, criminal law and procedure attorney at Winner Law Firm