POS terminals for Group 1 sole proprietors in Ukraine will be mandatory from 2026—no postponement or delay of the requirement

From January 1, 2026, new rules will come into force in Ukraine for small businesses. Cabinet of Ministers Resolution No. 894 from July 29, 2022, introduces an obligation for self-employed persons (FOP) of the first group under the simplified tax system to provide the possibility of cashless payments through payment terminals. The business community is actively urging the Cabinet to consider postponing this requirement due to numerous challenges it creates for microentrepreneurs.

Why business is asking for postponement

The reasons why entrepreneurs insist on reconsidering the date for introducing payment terminals relate to practical, economic, and technical aspects.

Economic burden for small entrepreneurs. FOP of the first group are the smallest participants in the economy. According to legislation, these are entrepreneurs who:

• have annual income up to 600 thousand hryvnias (exceeding the limit requires moving to another group);
• do not employ workers;
• work mainly independently at markets, in kiosks, in mobile trade format.

For such entrepreneurs, even small additional expenses are significant. Acquiring commissions range from 0.5% to 2.5% of the amount of each transaction, which directly reduces profit. At an annual turnover of 600 thousand hryvnias, even a 1% commission means a loss of 6 thousand hryvnias.

Internet connection problems. Many sales points, especially in villages, markets, and small towns, suffer from unstable or slow internet. Payment terminals require stable connectivity to operate. At crowded markets with many people, technical failures can lead to queues and customer loss.

Loss of elderly customers. Pensioners at markets often lack bank cards and distrust cashless payments. For many, this will be a serious obstacle to making purchases. The seller faces a situation where they must either refuse such customers or lose part of their customer base.

Complexity of organizing small points. When a seller works “from hand” (corn at the beach, flowers near the metro, a fisherman selling catch), the question arises: where to place the terminal and how to organize payments. Mobile acquiring through a smartphone theoretically solves the problem, but requires a gadget, stable internet, and digital skills.

Martial law. Part of the potential users of this rule, especially in regions near the front or on the periphery, are in combat zones. The requirement is introduced without full consideration of martial law realities and economic instability in certain communities.

What Resolution No. 894 provides

Resolution No. 894 established a phased introduction of the obligation to ensure cashless payments:

• Phase 1 (from January 1, 2023):traders in cities with population over 5 thousand residents.
• Phase 2 (from January 1, 2025):traders in settlements with population under 5 thousand residents.
• Phase 3 (from January 1, 2026):FOP of the first group, traders through vending machines, mobile traders, sellers of self-grown products.

The logic of the resolution is simple: if a business accepts cash, it must have the ability to accept cards as well. In practice, however, for small entrepreneurs, this rule raises far more questions than answers.

What alternatives to payment terminals exist

The law does not require installing specifically a classic POS terminal. FOP can choose from several options:

POS terminal from a bank. A traditional solution – renting or purchasing a terminal. Commission of 0.5–2.5% depending on the bank and transaction volume.

Mobile acquiring (Tap to Phone). A small device connected to a smartphone, or the smartphone itself as a terminal. Convenient for mobile trading.

QR codes for payment. A QR code is placed at the trading point, which the customer scans in a banking app. The tax service confirmed that this method meets the requirements of the resolution.

Payment links. The seller sends the customer a link via messenger or SMS, and the customer pays online.

Transfer to FOP account. The simplest option – when the customer makes a transfer to the entrepreneur’s bank account.

In theory, these tools allow compliance with the law. In practice, however, most of them require internet, a smartphone, and basic digital literacy, which many first-group entrepreneurs lack.

Why the Cabinet did not postpone the requirement

Despite numerous appeals from business associations, unions, and individual FOPs, the Cabinet left the effective date of the rule unchanged – January 1, 2026. The reasons are rather strategic than tactical.

Fighting the shadow economy. Cashless payments are the first step toward legalizing small business operations. A significant portion of transactions currently occurs “in the shadows” without being reflected in reporting.

Increasing tax revenues. Each transaction through a terminal leaves a digital trail. This allows fiscal authorities to realistically assess sales volumes rather than relying on conditional indicators.

Compliance with global practices. In many countries, even small traders have the ability to accept cards. Ukraine seeks to integrate into the European economic space and follow these standards.

Development of digital infrastructure. The requirement for terminals is part of a broader strategy for digitizing the economy for 2025–2027.

Penalties for non-compliance

The Cabinet backed the new requirement with substantial sanctions:

• for violation of consumer rights – a fine of 8,500 hryvnias for restricting a customer’s right to choose payment method;
• for failure to comply with cashless payment requirements – a fine from 1,700 to 17,000 hryvnias;
• in case of repeated violations, fines accumulate, with the maximum amount reaching 25,670 hryvnias.

The tax service has already warned that oversight will be active. The mere fact of the absence of cashless payment capability at a trading point can serve as grounds for imposing a fine – even without proven customer complaints.

Practical recommendations for FOP of the first group

Since there is little chance of deadline postponement, entrepreneurs should begin preparation now.

1. Choose an optimal solution.You don’t necessarily need to buy an expensive stationary terminal – consider mobile acquiring, QR codes, or transfers to your account.
2. Test the system in advance.At least six months before the deadline, start accepting cashless payments in test mode.
3. Choose a reliable partner.Compare offers from banks and payment services by commission rates, contract terms, speed of fund transfers, and support.
4. Inform customers.Place stickers and announcements about the possibility of card payment, especially focusing on an older audience.
5. Train yourself and assistants.If family members are involved in the business, explain to them the algorithm for working with the terminal or QR codes.
6. Document expenses.The cost of equipment and commissions can be counted as expenses that reduce taxable income.

Conclusions

The obligation for FOP of the first group to ensure cashless payments is a serious challenge for Ukraine’s smallest entrepreneurs. Numerous appeals for postponement demonstrate that for many, this is not simply a technical change, but a matter of business survival. At the same time, the state sees this reform as a path toward a more transparent economy, increased budget revenues, and alignment with European standards.

The date of January 1, 2026, remains unchanged for now, so preparation for the new rules is a matter of necessity, not choice.

Author – Yulia Popadin, tax and customs law practitioner, Attorney Association “Legal Company WINNER”.

If you have any questions or problems related to choosing the optimal cashless payment method for your business, protection from unfounded fines, appealing decisions of regulatory authorities, concluding acquiring agreements with banks, or maintaining tax accounting of cashless transactions – contact our team of professionals in the field of tax and customs law.