Fifty sole proprietorships on one network: tax evasion scheme in food retail uncovered in Zakarpattia
20 January 16:23
In Zakarpattia, law enforcement officers uncovered a large-scale tax evasion scheme in the retail food trade. According to the investigation, the business was artificially “split” into dozens of individual entrepreneurs, which allowed it to reduce its tax liabilities by tens of millions of hryvnias.
This was reported by the Office of the Prosecutor General, according to "Komersant Ukrainian".
What is the essence of the scheme?
According to the investigation, the management of a company that sells everyday goods divided its activities among controlled individual entrepreneurs who operated under a simplified taxation system.
In more than 50 stores of the chain, non-excise goods were sold using the details of almost fifty individual entrepreneurs between 2023 and 2025. Most of them were relatives of the company’s founders or its employees.
Formally, the stores operated under three different brands, but according to the prosecutor’s office, actual control over finances, turnover, and personnel remained with the company’s officials.
How much money did the state lose?
The total amount of products sold through this scheme exceeded UAH 100 million. According to the investigation’s estimates, this led to income tax and VAT evasion of more than UAH 25 million.
To make the transactions appear legitimate, the organizers entered into fictitious franchise agreements with controlled sole proprietorships and registered a lawyer’s office at the company’s headquarters.
Who is suspected
Two founders of the company, one of whom is the director, were notified of the suspicion. The accountant and executive director of the company, who also has the status of a lawyer, also became figures in the case.
They are charged with intentional tax evasion on a particularly large scale, committed by an organized group.
What the investigation has already achieved
During the pre-trial investigation, law enforcement officers seized electronic digital signatures, bank cards, seals of individual entrepreneurs, financial documentation, and powers of attorney, which, according to the investigation, confirm the company’s actual control over the entrepreneurs.
The prosecutor’s office reports that more than UAH 25 million in unpaid taxes has already been fully reimbursed to the state budget, and the use of controlled sole proprietors in the chain of stores has been stopped.
The investigation is being conducted by detectives from the Economic Security Bureau in Zakarpattia region. At the same time, the prosecutor’s office emphasizes that, in accordance with the Constitution, all persons involved in the case are considered innocent until proven guilty by a court of law.
Schemes for splitting up businesses through sole proprietorships have been the focus of law enforcement and tax authorities for several years. The head of the Verkhovna Rada’s tax committee, Danylo Getmantsev, previously stated that the growth in the number of sole proprietorships in Ukraine is often linked not to economic development, but to the use of a simplified system for tax evasion by large and medium-sized businesses.
