Starting April 1, self-employed security guards will be automatically transferred to the general system
Effective April 1, 2026, radical changes will take effect in Ukraine for individual entrepreneurs working in the security sector.
According to Law No. 4698-IX, the use of the simplified taxation system for security activities will be completely prohibited, and all violators will be automatically transferred to the general system.
Although the legislative ban formally took effect on January 1, entrepreneurs were granted a three-month transition period to adapt.
Those sole proprietors who did not submit an application to change their taxation system on their own by January 20 will lose their “single taxpayer” status at the start of the second quarter, as determined by the tax service.
The reform applies to entrepreneurs operating under the following KVED codes:
- 80.10 (Private security services);
- 80.20 (Security system maintenance);
- 80.30 (Investigation services).
Entrepreneurs who continued to accept payment for security services under the simplified system during January–March will face severe financial consequences.
All income received in the first quarter will be taxed at an increased rate of 15% as profit from a prohibited type of activity.
Following the automatic transition to the general system on April 1, the rules of the game for the security business have become significantly more complex.
Now, sole proprietors are required to pay 18% personal income tax, 1.5% military levy, and social security contributions on net profit, rather than on total revenue, as was previously the case.
The new system requires businesses to maintain strict expense records, as tax will be calculated based on the difference between income and documented expenses.
The use of cash registers (RRO/PRRO) is also becoming mandatory for cash or card transactions.
An additional burden for successful entrepreneurs will be the mandatory registration as a VAT payer if their income over the past 12 months exceeds the limit of 1 million UAH.
As a reminder, the Ministry of Finance plans to raise taxes for sole proprietors.
The Ministry of Finance has also presented a “major” tax bill.
