Systems of taxation of entrepreneurial activity: an integrated approach to the choice

Dobrova Nataly
lecturer of Department of Economics, Law and Business Management, Odesa National Economic University, Odesa, Ukraine, E-mail:dobrovanataly1963@gmail.com, ORCID: https://orcid.org/0000-0002-1786-1291

Karazhiya Eduard
Senior Lecturer Department of Economics, Law and Business Management, Odesa National Economic University, Odesa, Ukraine, E-mail:edkarazhiya@gmail.com, ORCID: https://orcid.org/0000-0002-3609-2432

Cite this article:

Dobrova N., Karazhiya E. (2025) Systems of taxation of entrepreneurial activity: an integrated approach to the choice. Ed.: V.V. Kovalenko (ed.-in-ch.) and others [Systemy opodatkuvannja pidpryjemnyckoi dijal''nosti: kompleksnyj pidhid do vyboru; za red.: V.V. Kovalenko (gol. red.)], Scientific Bulletin of the Odesa National Economic University (ISSN 2313-4569), Odesa National Economics University, Odesa, No. 1 (326), pp.48-56.

Abstract

The aim of the article is to develop and characterize general recommendations for selecting the optimal taxation system for entrepreneurial activities in Ukraine. By addressing the critical issue of taxation system choice, the study seeks to assist business entities in making informed decisions that will affect their fiscal relations with the state, interactions with other contractors, accounting practices, reporting requirements, and ultimately, their profitability. The methodology of the study is based on a comparative analysis of the existing taxation systems in Ukraine, namely the general and simplified taxation systems. The systemic approach involves studying the relationship between the conditions under which these systems can be applied by business entities, examining their respective advantages and disadvantages. The comparative analysis takes into account such legal requirements as the type of activity, the number of employees and income thresholds. The research also identifies the factors and stages involved in choosing the appropriate taxation system, providing a detailed evaluation to guide entrepreneurs. The findings highlight the necessity for business entities to make an evidence-based choice between the general and simplified taxation systems. The article specifies the practical problem faced by entrepreneurs in deciding whether to opt for the third group of the simplified taxation system or the general system. It underscores that the choice should be justified by carefully considering all relevant factors specific to the enterprise. The general taxation system, while more complex in terms of accounting and reporting, allows for engagement in any type of activity without the limitations inherent in the simplified system. Conversely, the simplified system offers ease of operation but comes with restrictions on certain activities, employee numbers, and income levels. The article contributes to the existing body of knowledge by providing an in-depth examination of the decision-making process involved in selecting a taxation system. It introduces a structured approach to evaluating the key factors that influence this choice, such as operational specifics and regulatory compliance requirements. This nuanced analysis enhances the understanding of how tax optimization can be achieved in the Ukrainian context, offering new insights into the strategic planning of fiscal responsibilities for business entities. The recommendations presented in the article serve as a valuable tool for entrepreneurs seeking to optimize their tax burden and improve the efficiency of their business operations. By selecting the most appropriate taxation system based on a thorough understanding of all influencing factors, businesses can ensure better compliance with legislative requirements, enhance their profitability, and foster more effective relationships with state fiscal authorities and other market participants. The study aids in demystifying the complexities of Ukraine's taxation systems, thereby supporting sustainable business development.

Keywords

taxation system, general taxation system, simplified taxation system, single tax, income tax, single social contribution, tax optimization, tax planning.

JEL classification:H210; H300; J230; M210;DOIhttps://doi.org/10.32680/2409-9260-2025-1-326-48-56

UD classification:336.2; 658(477)

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