Detectives of the Territorial Department of the Bureau of Economic Security in Chernivtsi Oblast are conducting a pre-trial investigation into tax evasion through so-called “business fragmentation.” According to BEB, the scheme was organized by the owner of a chain of over 100 grocery stores operating in Chernivtsi, Ternopil, and Khmelnytskyi Oblasts.
The investigation established that the individual entrepreneur, together with officials of the enterprise and controlled individual entrepreneurs, organized a mechanism to minimize tax liabilities. The scheme involved individual employees who kept "black" accounting, paid salaries in envelopes and controlled that the official income of individual entrepreneurs did not exceed the limits established by law.
As reported by BEB, the business operated under a "splitting" scheme, when real employees were not registered as employees, but were registered as second-group individual entrepreneurs. In fact, these individuals performed the duties of ordinary employees, were subordinate to one owner and worked in a single retail chain, but were formally considered individual entrepreneurs.
This model allowed dividing one business into dozens of individual entrepreneurs and avoiding paying income tax and value added tax, which would have to be paid in the case of officially conducting activities within a single enterprise.
BEB notes that as a result of the detectives' work, the chain of stores abandoned the "business fragmentation" scheme and began to operate transparently. This made it possible to withdraw activities from the shadow sector and provide additional revenues to the state budget.
As of now, the state has already received over 10 million hryvnias in compensation for damages. Work on the full refund of funds is ongoing.
The pre-trial investigation is being conducted under Part 2 of Article 212 of the Criminal Code of Ukraine — tax evasion. Operational support in the case is provided by the Security Service of Ukraine in Chernivtsi region, and procedural management is provided by the Chernivtsi Regional Prosecutor's Office.
