Sole Proprietor (FOP) With No Income in 2026: Taxes and Reporting

The author of the article: Denis Korablyov

Modified date: 22 July 2026

A sole proprietor (FOP) with no income is one of the most common situations among entrepreneurs. A business may be on hold, sales may not have started yet, or operations may have been temporarily suspended. But in this case, do you still need to pay taxes and USC and file tax returns?

The brief answer is: in most cases, yes. The absence of income does not automatically exempt a sole proprietor from mandatory payments and reporting. Let us examine exactly how much each group must pay in 2026, who may be exempt and what happens if you simply “forget” about an inactive FOP.

Does a FOP with no income have to pay taxes? A brief overview

It depends on the taxation system and the group. The basic rules are as follows:

To avoid confusion, let us consider each mandatory payment separately.

Single tax with no income

For single tax payers in groups 1 and 2, the rate is fixed and paid monthly in advance by the 20th, regardless of whether any income was received. In 2026, the amounts are:

• Group 1 – up to UAH 332.80 per month (10% of the subsistence minimum);
• Group 2 – up to UAH 1,729.40 per month (20% of the minimum wage).

Group 3, however, pays single tax as a percentage of income (5% without VAT or 3% with VAT). No income means no tax: in a month or quarter without receipts, the single tax for group 3 is zero.

Military levy with no income

Since 2025, FOPs using the simplified taxation system have also been required to pay a military levy. The same principle applies as with the single tax:

• Groups 1, 2 and 4 – a fixed amount of UAH 864.70 per month (10% of the minimum wage), regardless of income;
• Group 3 – 1% of income, so if there is no income, the military levy is zero.

Therefore, for groups 1 and 2, the military levy is another mandatory monthly payment, even when no business activity is conducted.

USC with no income: key points and why the exemption does not apply in 2026

The most important payment for an inactive FOP is the Unified Social Contribution (USC). In 2026, the minimum USC contribution for oneself is UAH 1,902.34 per month (22% of the minimum wage) and, as a general rule, must be paid regardless of whether the FOP received any income. For more details, see the article on USC for FOPs.

There is an important misconception that should be clarified. During martial law, FOPs had the right not to pay USC for themselves. However, this right does not apply in 2026 due to the provisions of the Law on the State Budget of Ukraine for 2026, as was also the case in 2025. Therefore, FOPs cannot rely on the wartime USC exemption in 2026 – the contribution must be paid.

At the same time, certain categories of FOPs are legally exempt from paying USC for themselves, even if they have no income:

1. old-age pensioners and persons with disabilities who receive a pension or social assistance (USC payments are voluntary for them);
2. FOPs employed under an employment contract at their main place of work, provided that their employer pays USC for them in an amount not lower than the minimum contribution;
3. mobilised FOPs without employees – for the duration of their military service.

These categories most often continue paying USC by mistake, even though the law no longer requires them to do so.

If you do not fall into any of these categories, you will have to pay USC in 2026 even if you conduct no business activity at all – including periods when your FOP is inactive.

How much does a FOP with no income pay in 2026? Table

Let us summarise everything. The table shows the mandatory monthly payments for a FOP with no income in 2026, excluding USC exemptions:

This means that even without earning a single hryvnia, a Group 1 FOP will pay approximately UAH 3,100 per month, while a Group 2 FOP will pay approximately UAH 4,500. For Group 3, the only cost of inactivity is USC. However, if you qualify for a USC exemption as a pensioner, person with a disability, employee or mobilised person, the USC amount should be excluded from the calculation.

As shown above, Group 1 and Group 2 FOPs bear the highest financial burden when conducting no business activity.

Calculated annually, inactivity can be costly: approximately UAH 37,200 for Group 1, approximately UAH 54,000 for Group 2 and UAH 22,828 for Group 3 (USC only). This is the real cost of keeping a registered but inactive FOP, which is why an inactive status should not be ignored. You should make an informed decision about what to do with it.

Reporting with no income: a tax return with zero figures

The absence of income does not exempt a FOP from reporting. A tax return must be filed even if no income was received, with zero figures:

• Groups 1 and 2 – a single tax payer’s tax return once a year, within 60 calendar days after the end of the year;
• Group 3 – a quarterly tax return within 40 calendar days after the end of the quarter, even if it contains no income;
• general taxation system – an annual tax return on property and income by 1 May of the following year.

If the tax return is not filed on time, a penalty applies – UAH 340 for the first violation and UAH 1,020 for a repeated violation within the same year. Therefore, even a dormant FOP must file reports on time.

What to do if your FOP is inactive

Many people hope they can simply put their FOP on hold. However, Ukraine does not have an official procedure for suspending FOP activities. As long as the FOP remains registered, mandatory payments continue to accrue and reporting obligations remain in force. There is no universal solution – it all depends on when you plan to resume your activities. In practice, there are two options:

The decision depends on your plans: sometimes paying USC for several months is less costly than dealing with re-registration, while in other cases the opposite is true.