---
title: "Cabinet of Ministers approves VAT simplification for sole proprietors: threshold for unscheduled audits raised to 1 million hryvnias"
description: "Ukraine's Cabinet of Ministers approved a bill simplifying VAT reporting for sole proprietors: fewer reporting periods and a higher threshold for unscheduled audits, raised to 1 million hryvnias. The reform is a condition for the third tranche of EU assistance."
date: 2026-09-03T18:28:00.000Z
lang: en
url: https://xab.info/en/posts/cabinet-approves-vat-simplification-for-sole-proprietors
tags: [vat-reform, ukraine-tax, sole-proprietors, eu-assistance, fop]
publisher: "XAB.info"
---

# Cabinet of Ministers approves VAT simplification for sole proprietors: threshold for unscheduled audits raised to 1 million hryvnias

![Tired sole proprietor working on a laptop in a cafe amid news of simplified VAT and a raised threshold of 1 million hryvnia for unscheduled tax audits](https://xab.info/media/2026/09/03/kabmin-uproshchenie-nds-dlya-fop/kabmin-uproshchenie-nds-dlya-fop-1.webp)

## 🎯 Key Points

- The Cabinet of Ministers approved a bill simplifying VAT reporting for sole proprietors and reducing the number of reporting periods per year.
- The threshold for documentary unscheduled audits of budgetary refunds and negative VAT is raised from 100,000 to 1 million hryvnias.
- The reform is a direct condition for receiving the third tranche of EU macro-financial assistance worth 1.45 billion euros; single tax rates will not change until the end of martial law.

The Cabinet of Ministers of Ukraine has approved a bill aimed at significantly simplifying the administration of value-added tax (VAT) for individual entrepreneurs (sole proprietors). The initiative, prepared by the Ministry of Finance, provides for a reduction in the volume of tax reporting, a decrease in the number of reporting periods per year, and the expansion of digital services for businesses. This is reported by RBC-Ukraine, citing the Ministry of Finance.

### What will change in VAT reporting

The key direction of the reform is reducing the administrative burden on small businesses. The bill provides for a reduction in the number of VAT reporting periods per year and a simplification of the format in which data is submitted. According to the authors, this will allow sole proprietors to spend less time interacting with tax authorities and focus on their operational activities. The document will be submitted to the Verkhovna Rada for consideration and voting in the near future.

### Threshold for unscheduled audits increased tenfold

One of the most notable changes is the raising of the threshold for conducting documentary unscheduled audits of budgetary refunds and negative VAT values. Previously, this threshold stood at 100,000 hryvnias, but after the adoption of the bill it will rise to 1 million hryvnias. In practice, this means that audits on this basis will cover a significantly smaller number of entrepreneurs, and the overall number of control measures should decline.

### The reform as a condition for the EU tranche

The Ministry of Finance emphasizes that the bill developed is an important part of fulfilling Ukraine's international obligations. In particular, this reform is named a direct condition for receiving the third tranche of macro-financial assistance from the European Union, amounting to 1.45 billion euros. Thus, the simplification of VAT reporting for sole proprietors goes beyond domestic tax policy and becomes an element of the country's European integration.

### Single tax: stability during the wartime period

At the same time, Ukraine does not plan to raise single tax rates or change the conditions for sole proprietors until the end of martial law. The government explains this by noting that such steps would not bring significant revenue to the state budget. Meanwhile, the Ministry of Finance, together with the State Tax Service, is already working out future changes to the single tax system, which may include raising the rate for some entrepreneurs to 10%. The key priority at the current stage remains maintaining stability for small, medium, and retail businesses during the wartime period.

## 🔍 Fact-Check Verification

- [Cabinet of Ministers approves major simplifications for individual entrepreneurs](https://www.rbc.ua/ukr/news/kabmin-pogodiv-masshtabni-sproshchennya-fop-1788458493.html) - Подтверждает согласование Кабмином инициативы Минфина по упрощению НДС и сокращению проверок для ФОП.
- [VAT simplification for sole proprietors: Cabinet approves major reform](https://novosti.ua/economic/kabmin-odobril-uproshchenie-nds-dlya-fop-i-sokrashchenie-proverok) - Согласуется с базовым текстом по содержанию реформы и сокращению отчетных периодов.
- [Changes for individual entrepreneurs from August 1, 2026: deadlines, audits, and new signs of financial monitoring](https://minfin.com.ua/2026/08/03/178976994/) - Использован как контекст по текущим изменениям для ФЛП в 2026 г.; прямых противоречий с базовым текстом не содержит.

## ❓ FAQ

### Q: What exactly is being simplified for sole proprietors regarding VAT?
**A:** The bill reduces the volume of tax reporting, decreases the number of VAT reporting periods per year, and expands digital services for entrepreneurs.

### Q: How will the threshold for unscheduled audits change?
**A:** The threshold for documentary unscheduled audits of budgetary refunds and negative VAT values is raised from 100,000 to 1 million hryvnias.

### Q: Will single tax rates for sole proprietors be raised?
**A:** Until the end of martial law, no increase in single tax rates or change in conditions for sole proprietors is planned; meanwhile, the Ministry of Finance and the State Tax Service are working out future changes, including a possible rate increase for some entrepreneurs to 10%.