Freelancing in Ukraine: the FOP single tax, Group 3's 5% rate, and the UAH 1,000,000 VAT line
A Ukrainian freelancer typically registers as a FOP (private individual entrepreneur) via Diia and opts into the single tax (yedynyi podatok). Most sit in Group 3, paying 5% of income (no VAT) plus a 1% military levy, under a UAH 10,091,049 turnover cap for 2026. A monthly unified social contribution (ЄСВ) of at least UAH 1,902.34 applies, and VAT registration bites at UAH 1,000,000.
This article is general information, not tax advice. Regulations change — verify the current rules with the official sources below before acting.
Going freelance in Ukraine usually means becoming a FOP (фізична особа-підприємець, a private individual entrepreneur) and opting into the single tax (єдиний податок, or yedynyi podatok) — a simplified regime that most freelancers prefer over the general 18% personal income tax system.
Registering as a FOP
You register as a FOP with the tax authorities, in practice through the Diia state portal, which handles registration online in a day or two. At registration you choose a single-tax group. Groups 1 and 2 are flat monthly amounts aimed at small local traders and service providers; most freelancers who invoice businesses or foreign clients sit in Group 3. You also choose your activity codes (KVED) and, from that point, keep simple income records.
The single-tax groups
Group 3 is the workhorse for freelancers. You pay the single tax as a percentage of income: 5% if you are not VAT-registered, or 3% plus VAT if you are. On top of that sits a 1% military levy on the same income base, introduced for Group 3 in 2025 — so the effective rate for a non-VAT Group 3 FOP is 6%. There is an annual turnover cap: for 2026 it is UAH 10,091,049 (1,167 minimum wages). Groups 1 and 2 pay fixed monthly single tax instead — capped at UAH 332.80/month (Group 1) and UAH 1,729.40/month (Group 2) in 2026 — with lower turnover caps of UAH 1,444,049 and UAH 7,211,598 respectively.
Social contribution and VAT
Separately from the single tax, a FOP pays the unified social contribution (єдиний соціальний внесок, ЄСВ / ESV) — a monthly amount of at least UAH 1,902.34 in 2026 (22% of the minimum wage of UAH 8,647). This funds pension and social insurance and is due even in months with no income, subject to certain wartime exemptions. VAT registration becomes mandatory once your taxable supplies exceed UAH 1,000,000 over the last 12 months; below that, most Group 3 freelancers stay on the 5% no-VAT track. The standard VAT rate is 20%.
Reporting rhythm
Group 3 FOPs file a single-tax declaration quarterly, completed on a cumulative (year-to-date) basis, and pay the single tax within 10 days of the filing deadline. Groups 1 and 2 file annually but pay their fixed single tax monthly. ЄСВ is reported once a year. Keeping your income log current through the year makes each quarterly filing a formality rather than a scramble.
General information about freelancing in Ukraine, current as of the review date above, and not tax advice. Groups, caps, and rates change — confirm current figures with the State Tax Service (tax.gov.ua) or a qualified accountant.
Frequently asked questions
What is the single-tax rate for a Group 3 FOP in Ukraine?
5% of income if you are not VAT-registered, or 3% plus VAT if you are. Since 2025 a 1% military levy applies on the same income base, making the effective rate 6% for a non-VAT Group 3 FOP. The 2026 annual turnover cap for Group 3 is UAH 10,091,049.
When must a Ukrainian freelancer register for VAT?
VAT registration is mandatory once taxable supplies exceed UAH 1,000,000 over the last 12 months. Below that threshold most Group 3 FOPs stay on the 5% no-VAT single tax. The standard VAT rate is 20%. Separately, every FOP pays a monthly unified social contribution (ЄСВ) of at least UAH 1,902.34 in 2026.