Sole Proprietor for Creatives in 2026: Single Tax Group, KVED Codes and Taxes
Designers, copywriters, photographers, video editors, SMM specialists, and targeting specialists are increasingly asking which sole proprietor group to choose, which Ukrainian Classification of Economic Activities codes (KVED) are suitable, and whether they can work with foreign clients. If you still accept payments to a personal card, this is risky: bank financial monitoring has become stricter, accounts may be blocked, and the tax authorities may treat such payments as personal income and charge an additional 18% personal income tax and 5% military levy.
The good news: working legally is not difficult if you choose the right single tax group and KVED codes for your profession from the start. In this article, we will look at the difference between groups 2 and 3, income limits, when each option is more beneficial, whether you need an RRO cash register, and which activity codes you need specifically.
Which sole proprietor group should a creative professional choose: group 2 or group 3?
If you work without registering as a sole proprietor, the tax authorities have the right to treat your receipts as personal income and charge an additional 18% personal income tax + 5% military levy = 23% of the total amount. In addition, a bank may block your account under financial monitoring rules if it sees regular “business” payments to a personal card.
That is why most self-employed professionals choose a sole proprietor on the simplified taxation system (single tax): taxes are minimal, and reporting is relatively simple.
Group 1 is not suitable for you – it is only for market trade and small household services provided to individuals. So your choice is group 2 or group 3.
Group 2 or group 3: what is the difference?
| Parameter | Group 2 | Group 3 |
|---|---|---|
| Tax | Fixed ~UAH 4,496/month (single tax UAH 1,729.40 + military levy UAH 864.70 + Unified Social Contribution UAH 1,902.34) | 5% single tax + 1% military levy on income + Unified Social Contribution UAH 1,902.34 |
| If there is no income | You still pay the fixed amount | You pay only the Unified Social Contribution |
| Annual income limit | up to UAH 7,211,598 | up to UAH 10,091,049 |
| Who you can provide services to | Only individuals and single tax payers | Anyone: individuals, LLCs on the general taxation system, foreigners, non-profit organizations, and government institutions |
| Reporting | Once a year | Quarterly |
*Amounts and limits are stated for 2026 and are tied to the minimum wage.
When group 2 is suitable
Group 2 sole proprietor status is suitable if your clients are ordinary individuals or other simplified taxpayers (sole proprietors or LLCs on the single tax) in Ukraine. The payment is fixed, and reporting is once a year – convenient for a stable local workflow.
When group 3 is required
If your clients include foreign customers, large companies (usually LLCs on the general taxation system), non-profit organizations (charitable foundations), or government institutions, you need group 3. The main advantage is that there are no client restrictions.
Important: if you are in group 2 and take even one client that is an LLC on the general taxation system or a foreign client for services, you may lose your simplified tax status and be transferred to the general taxation system retroactively. More details are available in the article “Sole proprietor group 2 or group 3: which is more beneficial?”.
What happens if you exceed the income limit? If you earn more during the year than your group allows, you will automatically be transferred to the general taxation system from the first day of the month following the quarter in which the limit was exceeded, and 15% single tax will be charged on the excess amount.
Therefore, it is worth monitoring your turnover in advance – we explain exactly how to calculate the limit in the article about exceeding the income limit.
Not sure which sole proprietor group to choose?
The specialists at buh.ua will select the right single tax group and correct KVED codes for your profession and clients, register your sole proprietorship, and take care of your accounting.
Which KVED codes do designers, copywriters, photographers, and SMM specialists need?
KVED is an activity code that you specify when registering as a sole proprietor; it shows the tax authorities what you do. If the KVED code does not match your actual activity, you may be forcibly transferred to the general taxation system with all the consequences. We have covered how to choose, add, or change a KVED code separately.
The golden rule: it is better to add too many than too few. One extra code that you use once a year is fine. But carrying out an activity without the required code is a direct path to losing your simplified tax status.
From January 1, 2027, KVED will be replaced by the new NACE 2.1-UA system – some codes will change. So the codes chosen now will later need to be checked against the correspondence table.
Sole proprietor status for a designer
Graphic design, brand identity, print design, and interior design for Ukrainian clients (individuals and single tax payers) – group 2 is suitable. If you work for foreign startups or Ukrainian companies on the general taxation system, group 3 is your option.
KVED codes: the main one is 74.10 “Specialized design activities”. Then add codes depending on your specialization: for UI/UX, add 62.01 “Computer programming”; for graphic design, 73.11 “Advertising agencies” may also be suitable.
Sole proprietor status for a copywriter
Texts for websites, social media, and advertising for Ukrainian clients who are single tax payers – group 2 (clients must only be single tax payers; individuals order copywriting less often). If you write English-language content for foreign platforms or work through international freelance marketplaces, choose group 3.
KVED codes: there is no single universal code – choose the one that most accurately describes your activity, plus related ones (information or creative activities, advertising agencies, and so on). Check the exact codes in the KVED classifier.
Sole proprietor status for a photographer and video editor
Wedding shoots, private photo sessions, and video editing for bloggers usually involve working with individuals, so group 2 is more common. Shooting corporate films, advertising videos, and promos for companies usually requires group 3.
A separate nuance is stock photo platforms (Shutterstock, Adobe Stock, Getty Images): depending on the agreement with the platform, this may be income from services, sale of digital content, or royalties – and the group and taxation will differ. This is not something to choose at random – check the terms of the specific platform.
KVED codes: for a photographer, the main code is 74.20 “Photographic activities”; for a video editor – 59.11 “Motion picture and video production…” (+ a code for post-production/editing). If you also sell courses, add the relevant education code.
Sole proprietor status for an SMM specialist and targeting specialist
In most cases, group 3 is used because the main clients are companies and medium-sized businesses that need services from a group 3 sole proprietor for their reporting. If your client is a sole proprietor or an LLC on the simplified tax system, group 2 may also work.
The main nuance is advertising budgets. If the client transfers to your account an amount that includes both your fee and money for advertising in Meta/Google/TikTok, the tax authorities will treat the entire amount as your income, and you will pay tax on the full amount (especially in group 3, where the tax is percentage-based). The solution: link the client’s card to the advertising account or sign a separate agreement for the advertising budget.
KVED codes: advertising agencies, advertising placement, data processing, hosting and related activities / web portals; add photography or video production codes if you also provide those services.
Does a creative professional need an RRO/PRRO cash register?
Many designers and photographers are afraid of cash registers – but in vain, because everything depends on the payment method.
- The client pays using IBAN details through their bank – a fiscal receipt is not required (this is a bank transfer).
- The client pays by card, through a terminal, payment link, LiqPay/WayForPay – this is a settlement transaction, and a PRRO receipt is mandatory.
So if you provide services online and accept payments to an IBAN, you generally do not need an RRO cash register. But if you accept card payments, connect a PRRO (a free application) and issue receipts.
More details are available in the article about RRO cash registers for cashless payments.
Typical mistakes creative professionals make when registering as a sole proprietor
- Accepting payments to a personal card. This is already personal income – 23%, plus the risk of account blocking.
- Taking “just one” LLC client on the general taxation system or a foreign client while staying in group 2. One such transaction is enough to lose your simplified tax status.
- Choosing a KVED code “blindly”. Carrying out an activity without the relevant code is grounds for transfer to the general taxation system.
- Forgetting about advertising budgets (SMM). Someone else’s money for advertising that comes into your account becomes your income.
- Accepting card payments without a receipt. If you accept card payments without a PRRO, the fine is 100% of the sale amount.
Frequently Asked Questions (FAQ)
Which sole proprietor group should a creative professional choose?
It depends on your clients. Group 2 is suitable if you work with individuals and other single tax payers in Ukraine; group 3 is required if your clients include foreigners, large companies on the general taxation system, non-profit organizations, or government institutions.
Can group 2 sole proprietors work with foreign clients?
Group 2 sole proprietors cannot provide services to non-residents – this violates the rules of the simplified tax system. Exporting services requires group 3 (more details are available in the article “Group 2 sole proprietor + foreign currency”).
How much tax does a group 2 sole proprietor pay in 2026?
About UAH 4,496 per month as a fixed amount: single tax UAH 1,729.40 + military levy UAH 864.70 + Unified Social Contribution UAH 1,902.34. The amount does not depend on income.
How much can you earn on the simplified tax system?
Group 2 allows up to UAH 7,211,598 per year, and group 3 allows up to UAH 10,091,049 per year (2026). Exceeding the limit leads to transfer to the general taxation system and a 15% tax on the excess amount.
What happens if you take on a company client while in group 2?
There is a risk of losing the right to use the single tax and being transferred to the general taxation system retroactively, where the tax burden is about 45% of profit.
Does a freelancer need a cash register?
If you accept payment using IBAN bank details, usually no. If you accept card payments (terminal, payment link, LiqPay), you need a PRRO and a fiscal receipt.
Are the client’s advertising budgets counted as my income?
Yes, if the client transfers them to your account. To avoid this, link the client’s card to the advertising account or sign a separate agreement for the advertising budget.
Conclusion
Proper sole proprietor registration is not just “paperwork”; it protects you from account blocks, fines, and additional tax charges. The logic is simple: group 2 is for working with individuals and single tax payers in Ukraine; group 3 is for cases where your clients include foreigners, large businesses, non-profit organizations, or government institutions. And KVED codes should be chosen strictly according to your actual activities, with a margin.
The sooner you set everything up correctly, the fewer risks you will face. And if your profession is difficult to classify (such as stock photo platforms or SMM with advertising budgets), it is better to check everything in advance than to fix mistakes during an audit. If you are only planning to start, begin with how to register as a sole proprietor in Ukraine.
Want to register as a sole proprietor without mistakes?
The buh.ua team will choose the right group and KVED codes, register your sole proprietorship, and handle your accounting while you focus on your creative work.
