Tax Court Victory - Simplified Tax Regime Re-Registration Allowed

Taxes - Ukraine

Lions Lawyers successfully represented a taxpayer in a landmark dispute with the tax authorities concerning the right to re-register as a sole proprietor (FOP) under the simplified taxation system within the same calendar year.

The case arose after the individual terminated their sole proprietorship and subsequently re-registered a new FOP in the same year. In both instances, the taxpayer elected to apply the simplified taxation regime — Unified Tax, Group III, 5% rate — and submitted the corresponding tax returns.

The tax authority refused to accept the filings or recognise the taxpayer as eligible for the simplified regime, relying on an asserted legal position that a sole proprietor who had already applied the simplified system earlier in the year could not do so again following re-registration.

We challenged this position in court.

Courts of first instance, appellate, and cassation levels all ruled in favour of our client, declaring the actions of the tax authority unlawful.

The courts confirmed that re-registration of a sole proprietor within the same year constitutes a new legal registration rather than a continuation of prior business status. Accordingly, the taxpayer retained the right to elect the simplified taxation regime again — including Unified Tax Group III at the 5% rate.

This decision establishes important judicial guidance for tax practice and provides clarity for entrepreneurs navigating business closure and re-registration within the same fiscal year.

Details have been anonymised to preserve client confidentiality.