More than 100 sole proprietorships across 253 stores: tax authorities uncover tax minimization schemes
8 April 16:23
Two major jewelry store chains have announced their willingness to abandon the practice of splitting up their businesses following audits and negotiations with the State Tax Service of Ukraine.
This was reported by Lesya Karnaukh, acting head of the tax service, according to "Komersant Ukrainian".
What the audits revealed
According to representatives of the tax service, the audits revealed signs of tax minimization through the use of a large number of individual entrepreneurs.
Specifically:
- at least 100 individual entrepreneurs were working in 253 jewelry stores;
- they used the simplified taxation system;
- in fact, the activities were linked to a single business network.
Tax officials believe that such a scheme could have been used to reduce the tax burden.
What violations were identified
In 2025–2026, the State Tax Service of Ukraine conducted over 50 audits of jewelry chains.
According to the results:
- the total amount of fines amounted to nearly 70 million UAH;
- the absence of cash registers was detected;
- unregistered labor was recorded;
- improper inventory records were identified.
What the companies promised
Following discussions with the tax authorities, representatives of the chains agreed to change their business model.
Specifically, they stated their intention to:
- operate through a single legal entity;
- resolve issues related to employee registration and payroll;
- report all transactions to the tax authorities.
The tax authorities emphasized that compliance with these agreements will be monitored.
Consequences of violations
The State Tax Service warned that if the agreements are not fulfilled, the state will respond accordingly.
This includes, in particular, further audits and the imposition of sanctions.
The situation in the jewelry market
According to the tax service’s estimates, most participants in the jewelry market operate within the legal framework and use point-of-sale systems.
At the same time, a significant portion of businesses report very low turnover, which may indicate that some transactions are being conducted in the shadow economy or that tax schemes are being used.
