Sole proprietors (FOPs) in group 1 of the single tax: POS terminals mandatory from 2026!

From January 1, 2026, revolutionary changes will come into force for Ukrainian micro-entrepreneurs. Sole proprietors (FOPs) registered under the first group of the simplified tax system will no longer be able to avoid installing point-of-sale (POS) terminals. This requirement extends to almost all entrepreneurs engaged in retail trade or providing services to the public. Ukrainian Cabinet of Ministers Resolution No. 894 (July 29, 2022) introduces a new obligation, ending a years-long transitional period for small businesses.

Main changes: POS terminals mandatory for everyone
From January 1, 2026, the obligation to install POS terminals applies to all traders and entrepreneurs accepting payments from the public, regardless of:

• location (large city or small village);
• annual turnover;
• number of employees;
• trade format (stationary, mobile, vending).

Under Cabinet Resolution No. 894, as of the new year, the following must provide the ability for cashless payments:

• First-group single tax FOPs.These are the smallest businesses, operating in markets or providing consumer services (hairdressers, carpenters, plumbers, photographers, tailors, etc.).
• Traders using vending machines(vending, water ATMs, account top-up machines).
• Entrepreneurs engaged in mobile/traveling trade(ice cream, flowers, newspapers, street vendors).
• Those selling personally grown or raised products(eggs, milk, vegetables, berries, home-raised meat).

Thus, 2025 is the last year when these categories can operate without POS terminals. Starting January 1, 2026, a payment terminal will be a legal requirement.

Important clarification: RRO and PRRO remain unnecessary
It’s crucial to understand that the obligation to install a POS terminal does not mean first-group FOPs must install cash registers (RRO—cash register devices, or PRRO—software RROs). These are separate issues.
According to Article 296.10 of the Tax Code and Article 9 of the Law “On the Use of Cash Registers,” first-group FOPs remain exempt from RRO/PRRO duties unconditionally. Even if a terminal is installed in 2026, there’s no obligation to issue fiscal receipts or install a register.

As a result, first-group FOPs have a unique position: they must accept card payments but aren’t required to record these via a cash register. Card payments via POS are classed as settlement operations, but for first-group FOPs, do not require fiscalization.

Technical aspects: What must be installed?
To comply with the law, first-group FOPs must ensure cashless payments using one of the following:

• POS terminal.Portable or stationary device connected to the internet (via Wi-Fi or 4G), accepting card payments; typical cost: UAH 3,000–8,000, depending on features/manufacturer.
• Mobile payment device (mPOS).Small device connecting to a smartphone by Bluetooth or USB, for card payments anywhere.
• Android-based payment device.Next-gen cash register merging RRO and POS in one device (UAH 8,000–12,000).
• Payment apps/services.Some banks offer payments via QR codes, mobile apps (Privat24, Monobank, Raiffeisen), or gateways, yet such solutions may have limited features/fees.
• Online cash register (web POS).For those trading remotely (website sales, social networks), a browser-based solution.

The choice depends on the FOP’s business model—traditional markets often use portable POS, mobile traders use mPOS, service providers may opt for Android payment devices.

Implementation costs: What expenses should FOPs expect?
There are both one-time and recurring costs:

• One-time:
  • Purchase of POS: UAH 3,000–12,000
  • Bank registration: usually free
  • Installation/setup: UAH 500–1,500
  • Staff training (if needed)
• Recurring:
  • Bank commission: 1–3% per transaction (commonly 1.5–2%)
  • Card network fee (Visa/Mastercard): typically bundled in the bank fee
  • SIM for connection: UAH 30–50/month (some models)
  • Internet access: UAH 50–200/month
  • Maintenance/warranty: UAH 20–100/month

Small first-group FOPs can expect average annual costs of UAH 5,000–15,000 (including commissions and connection costs).

Exceptions: Who is exempt in 2026?
Resolution No. 894 provides key exceptions for certain traders, notably those in:

• Active combat zones:FOPs in Donetsk, Luhansk, and frontline areas of Kharkiv and Zaporizhia regions retain the exemption
• Areas with functioning state e-resources in combat zones
• Potential combat zones:Settlements within potential frontlines
• Temporarily occupied areas—FOPs there also remain exempt

The list is set by Ministry of Community and Territorial Development; as of February 2025, List No. 376 includes over 100 communities.
However, this is temporary—if a settlement is removed from the list, FOPs have 3 months to install a terminal without penalty.

Penalties and administrative liability
Unaware first-group FOPs face severe fines:

• First offense:100–200 non-taxable minimum incomes (approx. UAH 1,700–3,400 in 2026)
• Violation of trading rules: UAH 17–170 (Code of Admin. Offenses)
• Repeat offense within a year:500–1,000 NTMI (approx. UAH 8,500–17,000)
• Consumer protection fine: up to UAH 8,500

Penalties can total UAH 12,000–25,000 if combined. Tax authorities may:

• Fine 3 days after a violation is found (no warning)
• Conduct scheduled/unscheduled audits
• Send evidence to law enforcement for systematic breaches

Note: fines are mandatory, not discretionary. The STS may fine immediately on a first audit.

How to install a POS terminal: Practical steps

• Choose provider/device:Consider business needs (portable, mPOS, Android, etc.); compare banking/payment provider fees and reputation.
• Prepare documents:Needed for POS registration: FOP registration copy, passport copy, tax ID, lease agreement.
• Sign a bank contract:Sets responsibilities, fees, termination. Read all terms carefully.
• Activate terminal:Set up per instructions supplied by the bank/provider.
• Inform clients:Place signage at point of sale and notify consumers about cashless options.
• Keep all documents:Save contracts, handover acts, commission reports—these may be needed for tax inspections.

Business and economic impacts
Though requiring a POS increases costs, the potential benefits are positive:

• Sales growth:Accepting cards boosts revenue by 10–20%
• Lower risks:Less cash held reduces theft/attack risk
• Better image:POS terminals show professionalism and modern business practice
• Accounting/ease:Card payments are bank-recorded, easier for bookkeeping
• New clients:Young clients, tourists, foreigners prefer card payments, expanding your market

Conclusion and recommendations
From January 1, 2026, POS terminal installation is mandatory for all FOPs, including those in the first tax group. First-group FOPs will incur costs, but do not require RRO/PRRO, simplifying matters. Exemptions remain for areas affected by combat or occupation only.

Author – Julia Popadin, attorney at the Tax and Customs Law Practice, WINNER Law Company.

If you have questions about legal aspects of POS implementation, bank contract analysis, consumer protection, appealing terminal fines, or consulting on tax and economic law changes—contact our business and administrative law experts.
WINNER Law Firm offers:

• advice on the best POS solutions for your FOP;
• contract review services before signing with banks or payment providers;
• representation in negotiations with finance institutions;
• assistance challenging penalties for terminal violations;
• legal support on new payment technology adoption;
• consultations on changes in law affecting your business.
  Contact us—we’re ready to help!