Illegal sale of jewelry: Business owner faces a fine of over 800,000 UAH
25 April 06:57
The State Tax Service of Ukraine has reported widespread violations by a business owner engaged in the manufacture and sale of jewelry made from precious metals and gemstones. The business owner faces a fine of over 800,000 hryvnias for selling goods “under the table.” This was reported by the State Tax Service of Ukraine, according to "Komersant Ukrainian"
What exactly did the tax service uncover?
According to the State Tax Service, during an on-site inspection, auditors identified several serious violations. The main one was the sale of jewelry without processing transactions through a cash register or its software equivalent.
In addition, a significant portion of the goods sold was not recorded in official documentation, meaning that, in effect, this constituted “gray” accounting and the sale of products outside established regulations.
In its statement, the tax authority explicitly noted that these violations were the basis for imposing penalties totaling over 800,000 hryvnias.
Why special rules apply to jewelry
The State Tax Service reminds that current legislation establishes special requirements for individual entrepreneurs operating under the simplified taxation system who are not VAT payers but sell certain categories of goods.
These include:
- jewelry and household items made of precious metals and stones;
- technically complex household goods subject to warranty repairs;
- medicines and medical devices.
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For these product groups, it is not enough to simply be a sole proprietor on the single tax—the entrepreneur is required to conduct all transactions exclusively through official cash registers (CRs) or point-of-sale systems (POSs), as well as maintain inventory records.
What are RROs and PRROs
A cash register (RR) is a traditional cash register, i.e., a cash register machine. A software cash register (PRR) is its software counterpart, which can operate via a smartphone, tablet, or computer. In the case of jewelry sales, the tax authority requires that all transactions be processed exclusively through such official fiscalization tools.
In addition to the absence of a cash register or software cash register, the tax authorities identified another violation—unaccounted-for merchandise.
According to the rules, a business owner is permitted to sell only those goods that are officially recorded in documentation and accounted for. If some jewelry is sold without being recorded in the inventory, this means the government cannot track the goods’ origin, the actual sales volume, or the accuracy of tax payments.
The tax service emphasizes that such consequences can only be avoided by strictly adhering to the rules: using a cash register or a cash register system, keeping inventory records, and selling only goods officially recorded in the documentation.
For jewelry sellers, these requirements are not recommendations—they are mandatory.
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