Short-term cottage rental in Ukraine done legally: sole trader, activity code, tourist tax

Many buyers of a Carpathian cottage plan to cover its costs with nightly lets, and most of them leave the paperwork until the tax office writes. That is the expensive order. Ukrainian law gives an owner four ways to receive money from guests, and the choice decides more than the tax rate: whether you may collect the local tourist tax, whether you need a fiscal till, which guests you are allowed to serve, and what happens if the authorities decide you have been running a business without registering. This guide sets out what the codes actually say, with the arithmetic to choose before you register rather than after.

Can a private owner let a cottage by the night without registering?

You can pay tax on it, but that does not make a regular letting business lawful. The Tax Code taxes an individual's income from letting property or residential lettings at 18% (para. 167.1), plus a 5% military levy. Where the guest is a private person, you calculate and pay the tax yourself within 40 calendar days after the quarter ends and file an annual return (sub-para. 170.1.5). Where a company or a registered sole trader pays you, the tenant becomes the tax agent and withholds the tax from your money (sub-para. 170.1.2).

The catch is elsewhere. The Civil Code allows an individual to carry on business only once registered with the state (art. 50(2)), and the Code of Administrative Offences fines business activity without registration at 1,000 to 2,000 tax-free minimum incomes, which is UAH 17,000–34,000, with possible confiscation of the money received (art. 164(1)). None of the codes we read sets a numeric line at which letting a home turns into a business, and the Law on Tourism even names individuals who "are not business entities and provide accommodation" (art. 5). Lending the house to friends for a few nights a year and running a cottage with permanent listings, cleaning and weekly changeovers are therefore different situations in law, and the second one looks like a business.

Four ways to set up a nightly let, side by side

The table shows what each form obliges you to do; it does not rank them. Tax figures come from the Tax Code and the 2026 minimum wage of UAH 8,647. The group 2 single tax is set by your local council, so the table shows the legal ceiling. FOP is the Ukrainian abbreviation for a registered individual entrepreneur, the usual form for a small owner.

Which activity code: 55.20, not 68.20

For nightly lets of a cottage, the code is 55.20. The usual mistake is to pick 68.20, "Renting and operating of own or leased real estate", because it contains the word renting. The State Statistics Service defines 68.20 as housing "for long-term use, usually on monthly or annual payment" and expressly sends short stays elsewhere:

This class does not include: the operation of hotels, multi-room hotels, holiday homes, furnished houses, tent camps, campsites and other non-residential or short-stay complexes, see division 55.

Class 55.20 describes your case: stays "usually on a daily or weekly basis" in chalets, cottages and small houses, including those let "without cleaning or meal services". If you clean daily and change linen like a hotel, you are drifting into class 55.10. For groups 1 and 2 a wrong code is costly: income from an activity that is not in your entry in the single-tax register is taxed at 15% (sub-para. 293.4(2)).

• Use 55.20 as the main code when you let a self-catering cottage or house by the night and do not clean it daily.
• Add 55.10 if in practice you run a small hotel, with daily cleaning, fresh linen and breakfasts.
• A code from division 56 belongs in your entry only if you serve meals as a catering business. That brings its own rules, which we set out in the guide to commercial property in a tourist village.
• Keep 68.20 for monthly lettings. Para. 291.5.3 then applies: a sole trader letting residential space of more than 400 m² in total cannot use the single tax.

What each option costs: a worked example at three turnovers

These are sums, not a forecast of what a cottage earns. Round turnovers are used so that the crossing points are visible. Group 2 is calculated at the ceiling rate, which is the worst decision your council could make; your community's rate may be lower. The social contribution is the minimum, 22% of the minimum wage each month.

Two thresholds follow from this. Group 3 becomes cheaper than the unregistered route from about UAH 134,283 of annual income. Group 2 at its maximum rate becomes cheaper than group 3 from about UAH 518,820. If your council has set a lower group 2 rate, that line moves down, so check the current local taxes decision first. Remember seasonality as well: group 2 is paid in November when no one comes, which we cover in the Carpathian rental year.

Tourist tax: what changes once you register

A sole trader providing temporary accommodation can become a tourist tax agent if the council designates it so; the council publishes its list of agents on its website (sub-para. 268.5.2). The guest pays, in advance of the stay (sub-para. 268.6.1). The council sets the nightly rate at up to 0.5% of the minimum wage for domestic visitors and up to 5% for visitors from abroad, which in 2026 means about UAH 43 and at most UAH 432.35 per person per night. The agent reports quarterly (sub-paras. 268.7.1, 268.7.3).

Owners often miss how many guests are outside the tax altogether (sub-para. 268.2.2). These people do not pay, and you need no receipt from them:

• people who live permanently in the same village, settlement or town whose council introduced the tax;
• children under 18, people with disabilities, and one companion of a person with a group I disability or a disabled child;
• war veterans and Chornobyl clean-up participants;
• registered internally displaced persons whose certificate gives this address as where they live;
• first- and second-degree family members whom the owner puts up in their own home.

Do you need a till if guests pay by card?

It depends on how they pay, not on the card. The Tax Code exempts only single-tax group 1 from fiscal registers (para. 296.10), and group 1 covers only market retail and household services to the public (sub-para. 291.4(1)); the Code does not say whether hosting guests counts as a household service, so building a nightly let on group 1 is a gamble. Groups 2 and 3 can rely on an exemption in the law on cash registers: no register is needed where payment for services is made exclusively through remote banking systems or money transfer services (Law 265/95, art. 9(14)).

• The guest sends the deposit and the balance to your sole-trader account from online banking: the exemption applies.
• The guest pays the balance in cash on arrival, or by card on a terminal: you need a register or a software register (PRRO).
• A mix of deposit by transfer and cash on arrival needs a till for the cash part, so it is simpler to agree one payment method with guests.

Step by step, from decision to first lawful guest

1. 1Estimate turnover and read your council's decisionFind the current decision on local taxes and levies on the council's website: the tourist tax rate, the list of tax agents and the group 2 single-tax rate. Put your own numbers into the table above.
2. 2Register as a sole trader in DiiaThe automatic FOP registration service on the state portal is free, the application takes about 10 minutes, and you choose the simplified tax system in the same form. Enter 55.20, plus 55.10 or 68.20 if relevant. The application is signed with an electronic signature.
3. 3Open a business account and fix the payment methodIf guests will pay only by bank transfer, no till is needed. If you take cash or card on a terminal, register a software register before the first such payment.
4. 4Settle your tourist tax role with the councilFind out whether you are already on the list of agents, what proof of payment the council expects, and whether it requires monthly advance payments by the 30th.
5. 5Keep records and pay on your group's calendarIncome records may be kept in any form, month by month (para. 296.1). Group 2 pays the single tax and levy in advance by the 20th of each month and files an annual return; group 3 files quarterly and pays within 10 days of the filing deadline.

Situations that change the sums

You are a pensioner or employed elsewhere

A sole trader drawing an old-age or long-service pension, or with a disability, is exempt from paying the social contribution for themselves (Law on the Single Contribution, art. 4(4)). So are months for which an employer has already paid at least the minimum contribution for you (art. 4(6)). Group 3 then costs only 6% of income, the last column above. The wartime relief that let sole traders skip the contribution is suspended for 2026 by the budget law, so do not count on it.

You live abroad and have become non-resident

A non-resident cannot use the single tax (sub-para. 291.5.7), and property belonging to a non-resident individual may be let only through a resident sole trader or company acting under a written agreement as the owner's tax agent (sub-para. 170.1.3). How to test your residence and what that representative must do is covered in managing a Carpathian cottage remotely.

A company books the cottage for its staff

Group 2 may serve only private persons and single-tax payers (sub-para. 291.4(2)), so a company on the general tax system is not a permissible client. Group 3 has no such restriction. If you are not registered, the company withholds the full 23% from you as tax agent.