A rolling window, not a calendar year
VAT registration becomes mandatory once taxable supply over the previous 12 calendar months exceeds UAH 1,000,000, net of VAT.
The operative word is "previous". This window moves every month; it does not start in January.
An example. Last October was a strong month at UAH 300,000, followed by a steady 70,000 a month. By September, the calendar-year total is around 630,000 and everything looks calm. The October-to-September total is over a million. The counter tripped, and nobody noticed, because they were watching the wrong number.
This is the most common error in self-prepared calculations. The owner tracks their simplified-system ceiling and assumes VAT sits nearby. They are two separate counters over two separate periods.
What actually goes into the million
What counts is supply of goods and services made by you as supplier — not "income" in the everyday sense, and not everything that lands in the account.
In practice:
- A loan or repayable financial assistance is not supply and does not count.
- Selling your own fixed asset is supply and does count.
- Selling through a marketplace that withholds commission: the full supply value counts, not the net amount you receive.
- Services to a non-resident: place of supply is determined separately, and this is where most confusion lives. Check it with an accountant rather than a forum.
The deadline that is easy to miss
The registration application is due no later than the 10th day of the month following the month in which supply crossed the million.
Missing it does not cancel the obligation. The tax authority will still treat you as a VAT payer from the moment the obligation arose and assess the tax for the period you did not charge it — without the input credit you would otherwise have had. That is the most expensive outcome available: you pay the VAT and cannot offset it.
So checking the counter is a monthly action, not an annual one.
3% with VAT or 5% without
For group 3 of the simplified system the rate depends on status:
| Single tax | VAT | |
|---|---|---|
| Not VAT-registered | 5% | not charged |
| VAT-registered | 3% | 20%, with input credit |
The two percentage points are not the whole picture. What matters is who you sell to.
If your buyers are VAT payers themselves, your VAT is not a cost to them — they credit it. Registration then opens doors rather than closing them. If you sell to end consumers, VAT lands in the price, and you either raise it by 20% or absorb it from your margin.
Our position: in B2B, voluntary registration is more often right than not, because large clients frequently will not consider a supplier without it. In B2C, registering voluntarily is rarely the right call. The objection applies when you have substantial purchases carrying input VAT — the credit can outweigh everything else, and that is a calculation rather than a guess.
On the promised rise to UAH 4 million
Statements about raising the threshold for sole traders to four million appear in public discussion from time to time.
As at 17 September 2026 that is an announcement, not law. Planning around an announcement is unwise: until legislation passes, the counter runs on the current rule, and the million does not wait for the legislature.
Verified 17 September 2026. Check the current Tax Code wording before acting — the simplified-system ceilings track the minimum wage and change annually.