Simplified taxation system for law firms: what you should know
Ukraine has two main systems of taxation of legal entities: general (income tax and VAT payers or those without) and simplified (single tax payers with or without VAT). The latter is usually the most suitable for a law firm.
When submitting documents for the registration of a legal entity, a law firm may indicate in the application for state registration of a legal entity (Form No. 2) on the additional page 9, information on the choice of the simplified taxation system (single tax group 3, select the tax rate in %), indicate the place of business, and determine the desired date of voluntary registration as a value added tax payer (until the sales volume reaches UAH 1 million). The procedure for selecting and applying the simplified taxation system with the payment of a single tax is set forth in Section XIV «Special Tax Regimes» of the Tax Code of Ukraine.
If, when submitting documents for state registration, a banking institution fails to indicate the choice of the simplified taxation system, such banking institution will be registered as a taxpayer under general conditions (income tax payer). Subsequently, in order to choose the simplified taxation system, an application should be submitted in the form approved by the Order of the Ministry of Finance of Ukraine dated 16.07.2019 No. 308.
According to the second paragraph of subpara. 298.1.2 of the Tax Code, business entities registered in accordance with the procedure established by law (newly established), which within 10 days from the date of state registration have submitted an application for the simplified taxation system and the single tax rate established for the third group, which does not provide for the payment of value added tax, are considered single tax payers from the date of their state registration. The transition to the simplified taxation system with the choice of the single tax rate may be made at the beginning of any quarter, but only once a year.
In view of the current version of Article 293 of the Tax Code, a law firm may be a single tax payer of the third group only. The following rates are set for the third group of single tax payers:
- 3% of income - if VAT is paid on a general basis;
- 5% of income - if value added tax is included in the single tax (more convenient and easier to understand).
The reporting period for single tax payers of the third group is a calendar quarter.
The reporting deadline is 40 calendar days after the end of the reporting quarter.
The deadline for paying the single tax is within 50 calendar days after the end of the reporting quarter.
By the way, December 15, 2023 is the last day to apply for the simplified taxation system starting from the first quarter of 2024.
The article was prepared by Dmytro Khutornyi, Deputy Chairman of the UNBA Committee on Legal Practice.
Popular news
Self-government
A report on Ukrainian advocacy was presented in the European Parliament
Can a shadow report on advocacy replace the political framework of the Roadmap on the rule of law with demands for the restructuring of self-government? Where is the line between accountability and the seizure of institutions? And how can we respond to narratives with data rather than impressions?
Guarantees of the practice of law
Proceedings opened following attack on advocate in Dnipro
The Committee for the protection of advocates' rights and guarantees of legal practice of the UNBA appealed to law enforcement agencies in connection with an advocate's report of an attack while performing his professional duties. The information was entered into the Unified Register of Pre-trial Investigations and a pre-trial investigation was initiated.
Abroad
UNBA office opens in EU capital
To strengthen the institutional presence of the Ukrainian advocacy community at the European level, an office of the Ukrainian National Bar Association has been opened in Brussels (Belgium), which will serve as a permanent platform for dialogue with European partners.
Guarantees of the practice of law
The President was urged to sign the law on strengthening guarantees for advocacy activities
The professional community of advocates called on Ukrainian President Volodymyr Zelenskyy to sign Law No. 4547-IX, which strengthens guarantees for advocates' activities, in particular by introducing liability for identifying an advocate with a client.
Greetings
Lidiya Izovitova received an award from the Czech Bar Association
On January 23, during the gala evening of the Lawyer of the Year 2025 competition in Prague, Monika Novotná, President of the Czech Bar Association (ČAK), presented Lidiya Izovitova, President of the UNBA, BCU, with the Order of the Czech Bar, an award for distinguished representatives of foreign bar associations.
Appointment
Oleksiy Shevchuk appointed to the Competition Commission for the selection of SAPO management
Prosecutor General Ruslan Kravchenko issued order No. 405 of December 23, 2025, on the appointment of members of the Competition Commission, which will select candidates for vacant administrative positions in the Specialized Anti-Corruption Prosecutor's Office (SAPO).
Guarantees of the practice of law
Identifying an advocate with a client is a blow to justice, — V. Gvozdiy
By defending individuals in criminal proceedings, advocates are in fact fighting for every person's right to a fair trial. Therefore, any identification of an advocate with their client is a blow not only to the profession, but also to justice itself.
Guarantees of the practice of law
Impunity for public stigmatization of advocates violates the constitutional right to defense
The prohibition of identifying an advocate with a client is an international standard enshrined in the Law «On advocacy and legal practice». However, without accountability, this guarantee does not work, which poses a direct threat to the realization of the right to defense and the principle of adversarial proceedings.
Publications
Volodymyr Matsko Extradition as a systemic form of rights violations
Victoria Yakusha, Law and Business The anti-corruption vertical cannot «take care» of the Bar as an institution, - acting head of the HQDCB
Censor.net Protecting advocates – protecting justice: addressing concerns about the new law
Ihor Kolesnykov A BRIEF SUMMARY REGARDING THE APPLICATION OF THE ORDER ON EXTENDED CONFISCATION IN LATVIA REGARDING FINANCIAL ASSETS OF…
Valentyn Gvozdiy WORKING IN A WAR ZONE
Lydia Izovitova Formula of perfection
Sergiy Vylkov Our judicial system is so built that courts do not trust advocates
Iryna Vasylyk Advocacy in the proclamation of Independence of Ukraine
