Large Taxpayers vs. Large Enterprises: Understanding the Difference

Large Taxpayers under the Tax Code of Ukraine and Large Enterprises under the Law of Ukraine on Accounting and Financial Reporting—who are they, and what is the difference? According to Ukrainian legislation as of 2026, the criteria for determining “large” business entities differ depending on the purpose: for taxation or for financial reporting. Let’s break it down.

1. Large Taxpayer (LTP)

Defined by the Tax Code of Ukraine (sub-paragraph 14.1.24), a “Large Taxpayer” is a legal entity or a permanent establishment of a non-resident in Ukraine that meets specific financial thresholds.

It is important to note that this status does not arise automatically. The State Tax Service (STS) compiles and approves the list of Large Taxpayers annually. An entity is officially considered an LTP only from the date it is included in this list, rather than immediately upon hitting the financial marks.

Such companies are serviced by a specialized body: the Interregional Department of the STS for Large Taxpayers. The full list for the current year can be found in the official Register of Large Taxpayers.

2. Large Enterprise

The definition of a “Large Enterprise” is established by the Law of Ukraine “On Accounting and Financial Reporting in Ukraine” (Article 2). This category includes business entities that do not fall under the “small” or “medium” categories and meet at least two of the three following criteria (based on the annual financial statements for the year preceding the reporting year):

• →Total Assets: Over 20 million euros.
• →Net Sales Revenue: Over 40 million euros.
• →Average Number of Employees: Over 250 people.

The “Two-Year Rule” for Status Transition

A key feature of this classification is the stability of the status. A category is determined based on indicators for two consecutive years.

• Acquiring the status: If an enterprise meets at least two of the “large” criteria for two years in a row, it officially becomes a “Large Enterprise” starting from the third year.

• Losing the status: To transition to a lower category (e.g., medium), the enterprise must fail to meet the “large” criteria for two years in a row.

Example: If your company met the criteria in 2024 and 2025, it is considered a “Large Enterprise” for the 2026 reporting period.

For the purpose of currency conversion into UAH, the legislation requires using the average annual official exchange rate of the NBU for the relevant period.

3. Key Differences

Who is Required to Apply IFRS?

According to Ukrainian legislation, the obligation to use International Financial Reporting Standards (IFRS) is primarily determined by the Law of Ukraine “On Accounting and Financial Reporting in Ukraine” (Article 12-1). The following entities are required to prepare their financial statements under IFRS:

1. Large Enterprises

All enterprises categorized as “large” based on the criteria of the Law on Accounting (assets €20M, net sales revenue €40M, staff 250) are mandatory IFRS adopters for their financial reporting.

2. Specific Categories of Taxpayers (Regardless of Size)

Even if a company does not meet the “large” criteria, it must use IFRS if it belongs to any of the following:

• Public Interest Entities: This includes large enterprises, banks, insurers, non-state pension funds, and other financial institutions.

• Public Joint-Stock Companies.

• Extractive Industries: Entities engaged in the extraction of minerals of national importance.

• Specific Business Types: Companies performing activities from a list determined by the Cabinet of Ministers of Ukraine (e.g., providing financial services, excluding insurance).

Are “Large Taxpayers” (per the Tax Code) required to apply IFRS?

Status as a Large Taxpayer (LTP) under the Tax Code does not automatically obligate a company to transition to IFRS. However, in practice, the LTP criteria (total income over €50M) are almost identical to—or encompass—the “Large Enterprise” criteria under the Law on Accounting (net sales revenue over €40M).

Who is Required to Perform a Financial Audit?

• According to Ukrainian legislation as of 2026, the obligation to undergo a mandatory audit of financial statements applies to the following categories of enterprises:

  1. Large Enterprises (per the Accounting Law)

  These entities are obliged to conduct an annual mandatory audit of their financial statements. This is a requirement of the Law “On Accounting and Financial Reporting in Ukraine.” Since these enterprises prepare their reports under IFRS, the auditor’s report is an integral part of their annual report, which must be published on their official website.

  2. Large Taxpayers (LTP per the Tax Code)
  • There is no automatic obligation to undergo an audit solely due to having LTP status under the Tax Code. However, since the LTP criteria (total income > €50M) are almost identical to or encompass the criteria for a Large Enterprise (net revenue > €40M), almost all Large Taxpayers fall under the mandatory audit requirement as “Large Enterprises” under the Accounting Law.
  • Tax Requirement: Corporate income tax payers who are obliged to publish financial statements (including Large Enterprises) must submit these statements to the State Tax Service (STS) along with the auditor’s report.
  3. Other Entities (Regardless of Size)Other Entities (Regardless of Size)

  Mandatory audits are also required for public interest entities (banks, insurers, and securities issuers on stock exchanges), public joint-stock companies, medium-sized enterprises, natural monopolies operating in the national market, and enterprises in the extractive industries.

• Summary Table

• Category	Mandatory Audit	Legal Basis
  Large Enterprise	Yes	Law on Accounting (Art. 14)
  Large Taxpayer	Yes	(In 99% of cases) As a Large Enterprise by revenue indicators