More than 27.9 million hryvnias “disappeared” from the financial statements: BEB uncovers a scheme in the flower business
9 July 06:30
Detectives from the Volyn Regional Office of the Economic Security Bureau have completed a pretrial investigation into a case of large-scale tax evasion involving the import and sale of floral products. According to the investigation, a chain of flower shops operating in ten regions of Ukraine concealed more than 27.9 million hryvnias in revenue by using a scheme to artificially fragment the business.
This was reported by the press service of the Economic Security Bureau of Ukraine, as reported by "Komersant Ukrainian"
How the scheme worked
According to investigators, the company’s management organized the sale of flowers through a network of controlled individual entrepreneurs who were registered under the simplified tax system.
Formally, the products were sold by individual sole proprietors, but in reality, they did not engage in independent entrepreneurial activity; rather, they worked as regular employees of a single company.
According to the BEB, it was precisely this scheme that allowed the company to minimize its tax liabilities.
The investigation established that in 2025, the company failed to report over 27.9 million UAH in revenue from the sale of floral products in its tax returns.
As a result, according to the BEB, the company evaded payment of:
- value-added tax;
- corporate income tax.
The total amount of unpaid taxes was 10.6 million UAH.
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What Was Seized During the Searches
During the investigative proceedings, detectives seized:
- financial documentation;
- draft accounting records;
- computer equipment;
- qualified electronic signatures of controlled sole proprietors;
- other evidence confirming the use of a business fragmentation scheme.
The BEB uncovered another scheme
In addition to tax violations, BEB analysts identified risks of minimizing customs duties on flower imports.
Specifically, these included:
- undervaluation of the customs value of goods;
- substitution of product classifications during customs clearance.
Following the BEB’s intervention, flower imports began to be declared at a higher customs value.
As a result:
- the declared customs value of the goods increased by 137 million UAH;
- the amount of customs duties increased by 36.5 million UAH;
- the total value of import transactions increased 2.5-fold compared to the same period, with the same number of shipments.
The company’s director was notified of the suspicion
The company’s director was notified of suspicion under Part 3 of Article 212 of the Criminal Code of Ukraine—tax evasion on an especially large scale.
The BEB noted that the losses incurred by the state, amounting to 10.6 million UAH, have already been fully reimbursed.
In addition, the suspect voluntarily transferred 500,000 UAH to support the Armed Forces of Ukraine.
The criminal case has already been referred to court along with a motion to exempt the suspect from criminal liability in accordance with Part 4 of Article 212 of the Criminal Code of Ukraine, since the losses incurred by the state have been fully compensated.
The Volyn Regional Prosecutor’s Office oversaw the proceedings in this case.
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