Fictitious patents and licenses: how pharmacy chains, according to investigators, underpaid taxes
30 January 21:14
The Kyiv City Prosecutor’s Office, together with the State Tax Service, announced the exposure of a long-standing tax minimization and money laundering scheme, which, according to the investigation, involved about ten pharmacy chains throughout Ukraine. This concerns the period from 2022 to 2025 and more than 180 companies.
This was reported in a Telegram message by Ukrainian Prosecutor General Ruslan Kravchenko, according to "Komersant Ukrainian".
What is the essence of the scheme?
According to the investigation, in 2021, the organizer created a foreign representative office in Ukraine, which registered patents related to the disinfection of premises and rodent control using ultrasound. Subsequently, pharmacy chains transferred funds for the use of these patents in the form of royalties.
Law enforcement officials believe that:
- the services were not actually provided,
- the business transactions had no real economic substance,
- the payments were used to artificially reduce income tax.
Scale
The investigation claims that over three years, more than UAH 2 billion could have been transferred to the shadow economy through the royalty mechanism.
How the legalization worked
According to the prosecutor’s office, to support the transactions:
- controlled persons were involved,
- loyal company management was appointed,
- license agreements were concluded,
- acts of work performed were signed in the absence of actual services.
Status of suspects
The director and chief accountant of the controlled structures have been notified of suspicion of official forgery. According to the investigation, they have provided incriminating testimony.
The organizer of the scheme is charged with official forgery and legalization of income obtained by criminal means. Law enforcement officials reported that they are establishing his whereabouts and preparing a motion for a preventive measure.
What this means for the market
The case could set a precedent for the pharmaceutical sector, where royalties and license fees are often used as a tool for tax optimization. At the same time, the final conclusions regarding the guilt of the defendants must be made by the court.
