---
title: "The new tax code takes the single tax away from online stores!"
author: "Stan Voo"
url: https://www.99rabbits.com/blog/new-tax-code-takes-the-single-tax-from-online-stores
published: 2010-07-08
summary: "Ukraine's draft tax code would push online stores off the simplified tax. Up top they picture Rozetka; in reality most online stores are tiny businesses just starting out."
---

# The new tax code takes the single tax away from online stores!

So as not to repeat what's been said, I'll quote [e-commerce.com.ua](http://e-commerce.com.ua/2010/06/%D0%BD%D0%BE%D0%B2%D1%8B%D0%B9-%D0%BD%D0%B0%D0%BB%D0%BE%D0%B3%D0%BE%D0%B2%D1%8B%D0%B9-%D0%BA%D0%BE%D0%B4%D0%B5%D0%BA%D1%81-%D1%83%D0%B2%D0%B5%D0%B4%D0%B5%D1%82-%D1%83%D0%BA%D1%80%D0%B0%D0%B8%D0%BD/):

> ... according to the draft of the new Tax Code of Ukraine, published on the website of the Verkhovna Rada, Ukraine's parliament, on June 15 this year (Section XIV, "Special tax regimes", Art. 2.2), the simplified tax system (the single tax, Ukraine's simplified tax for small businesses) **does not apply** to business entities, both legal entities and individual entrepreneurs, engaged in:
>
> - **wholesale and retail trade over the Internet**;
> - providing the services of Internet providers;
> - activities in the field of informatization;
> - providing access to the Internet.

When they hear "online stores" up there, they apparently think only of Rozetka, the big online electronics store, and its like. But that's exactly the point: Rozetka is an LLC anyway, as far as I know, and this won't affect them. Somebody has to make them understand that online stores in Ukraine are mostly very small businesses in their infancy, and the "Rozetkas" can be counted on the fingers of one hand.

This sentence in one of the drafts of the Tax Code explains everything, in my opinion:

> It is unacceptable that the simplified tax system, for the purpose of minimizing tax payments, is used in types of activity that by their nature can be regarded as "super-profitable", while in some cases certain types of activity require no capital investment or material costs to create the products sold to consumers (that is, the income received is passive).

**Online stores have been classed as "super-profitable".**

The [Association of E-Business Participants of Ukraine](http://uelbu.org/) isn't stirring at all over this, for some reason. Apparently it hasn't yet taken shape as a working organization. Though it could have got itself some PR by standing up for online stores.

**What to do?**

1. I don't know.
2. Sign the "[Appeal of Ukraine's small and medium business associations regarding the significant worsening of conditions for doing business in the country](http://www.kchp.com.ua/akcii-protesta/obrashenie-associaciy-malogo-i-srednego-biznesa-ukrainu-otnositelno-sushestvennogo-uhudshenija-usloviy-vedenija-biznesa-v-gosudarstve.html)".
3. Unite and make more noise.
4. [kodeksu.net](http://kodeksu.net/) ("no to the code").
5. Someone wrote a letter to Oleksandra Kuzhel; she replied, more or less, that it wasn't at all clear what the deal was with these online stores, and asked for explanations and arguments... [More on the forum of the newspaper *Chastny Predprinimatel* ("Private entrepreneur")](http://www.chp.com.ua/forums/index.php?showtopic=11812) (the site is down at the moment, for some reason).

P.S. And here's a little something for dessert:

*(Image lost: a screenshot of V. F. Yanukovych's election program from the website of the Central Election Commission, [http://www.cvk.gov.ua/](http://www.cvk.gov.ua/); the image linked to [the program's page](http://www.cvk.gov.ua/pls/vp2010/WP0011).)*

**Where are our tax holidays???** I think now is just the time to ask that question!

*Update, July 11, 00:52*

[The Verkhovna Rada has decided to put the draft Tax Code to a nationwide discussion](http://www.chp.com.ua/index.php?code=8867\&show_all=YESS)