If you are an individual entrepreneur on a single tax and want to add a new line of business, the law does not stop you. There is no limit on the number of types of activity in Ukrainian legislation. But there is a condition that is more important than any number. The publication “Debet-Kredit” told about it.
How many KVEDs can an individual entrepreneur have on a single tax
The Tax Code obliges an entrepreneur to simply indicate the selected KVEDs in the application upon registration and that’s it. Nowhere does it say “no more than ten” or “no more than twenty”.
For example, an entrepreneur simultaneously writes custom code, sells handmade souvenirs and advises small businesses on marketing. Three completely different areas, and all three can be legally kept in one register. The law does not prohibit this.
But there is also a practical point. Registering 30 KVEDs “just in case” is a bad idea. If the State Tax Service audit comes and it turns out that half of the registered activities have never brought income, there will be many questions.
What types of activities will block an individual entrepreneur from using the simplified system
The real restriction is not in quantity, but in what the individual entrepreneur is doing. Some areas are simply closed for the single tax.
For example, the trade in cigarettes, alcohol, and most other excisable goods is prohibited. Mining, financial intermediation, and security business are also not suitable for the simplified taxation system.
We previously wrote about which specific economic activities are prohibited and what threatens an entrepreneur for violation. The price of a mistake is a forced transition to the general system plus 18% personal income tax on all income from prohibited activities.
A separate point for those who rent out real estate: specific economic activity 68.20 (“rental of real estate”) must be registered explicitly. Without it, even a regular apartment rental can result in an additional charge at a rate of 23%.
How many KVEDs does an individual entrepreneur really need
Most entrepreneurs manage with two to five types of activity, this is enough for the vast majority of business models.
The sensible logic is simple: the main direction plus related ones that are really related to what you do.
If the business grows, then you add them. If a KVED has not been used for a long time, it is better to remove it so as not to create unnecessary questions.
Before each expansion of the list, it is worth comparing a new type of activity with the list of KVEDs prohibited for the single tax, especially now, when Ukraine is preparing to transition from KVED to the European standard NACE 2.1.
