In the Lviv region, a scheme of artificial business splitting via sole traders was uncovered, as a result of which more than UAH 60 million in taxes did not reach the state budget. Following the intervention of the Territorial Office of the Bureau of Economic Security in the Lviv region, these funds were returned to the budget.
According to the investigation, the director of a chain of electronics shops, who managed a company engaged in the retail trade of electronic equipment, telecommunications equipment and accessories, organised a scheme that made it possible to conceal income of more than UAH 361.6 million. This enabled tax evasion in the amount of more than UAH 60 million.
The actions of the official were classified under Part 3 of Article 212 of the Criminal Code of Ukraine as deliberate tax evasion on an especially large scale. The case file has been sent to court with a motion to release the suspect from criminal liability in connection with full compensation for the damage caused to the state.
The BES notes that this is only the first stage of the work, and checks on other aspects of the chain’s activities are ongoing. In addition, the company has voluntarily transferred UAH 2 million of the planned UAH 5 million to the needs of the Armed Forces of Ukraine, and has promised to pay the remaining funds in the near future.
“A sole trader is a perfectly legitimate tool for small business. We step in when sole traders are used not to run their own business, but so that big business pays less tax into the budget and gains an advantage over those who play by the rules,” said BES Director Oleksandr Tsyvinskyi.
The Bureau of Economic Security stresses that business splitting only appears at first glance to be ordinary optimisation. In reality, such schemes deprive the state budget of substantial funds, while the companies that use them gain an unfair advantage over transparent businesses. Identifying such schemes and returning funds to the budget, according to the agency, ensures a level playing field for all market participants.