VALUE ADDED TAX AS A FACTOR OF INFLUENCE ON THE DEVELOPMENT OF SMALL ENTREPRENEURSHIP: UKRAINIAN MODEL AND POLISH EXPERIENCE

Abstract

The article examines the potential consequences of the introduction of mandatory registration by value-added tax payers for individual entrepreneurs operating on a simplified taxation system. It is noted that from 2027, Ukraine plans to introduce a legislative norm that provides for mandatory VAT registration for entrepreneurs with an annual turnover of over 1 million UAH. These changes are due to the need to fulfill international obligations, in particular within the framework of the IMF’s Extended Fund Facility program, as well as the integration of the Ukrainian tax system into the norms of the European Union.

The paper analyzes the Polish model of VAT administration as an example of a balanced approach to microbusiness regulation, combining the establishment of realistic thresholds, digital tax administration mechanisms and flexible conditions for cross-border trade of small businesses. A comparative analysis of tax approaches in Poland and Ukraine is conducted, taking into account thresholds, legal regulation and economic feasibility.

The article highlights the risks of introducing such changes in Ukrainian conditions without proper digital infrastructure, without the introduction of special regimes or a transitional period. In particular, it concerns the possible shadowing of business, an increase in the tax burden on entrepreneurs with low profit margins, as well as a potential decrease in the number of registered business entities.

As a result, the authors formulated practical conclusions and proposals for improving the regulatory approach, in particular: a gradual increase in the threshold for VAT registration, the development of simplified electronic reporting tools, the introduction of preferential regimes for microbusinesses adapted to the realities of the transitional economy.

The article also focuses on the legal aspect of introducing mandatory VAT registration for individual entrepreneurs operating under the simplified taxation system. Potential conflicts between the planned changes and current legislation, in particular the Tax Code of Ukraine, as well as the need to make systemic changes to subordinate regulatory legal acts are analyzed. Particular attention is paid to the need for legal regulation of simplified VAT accounting mechanisms for small businesses and the harmonization of innovations with European norms regulating the activities of business entities in the context of integration into the EU common market.