The Economic Security Bureau of Ukraine is actively developing its analytical operations and using modern data analysis tools to detect tax evasion schemes. One of the most common schemes of this type is the so-called business “splitting”.
The essence of the scheme is that one large business is artificially registered as the activity of hundreds of separate individual entrepreneurs. Externally, it looks like the work of many independent FOPs, but in practice, they may operate as a single network, sharing warehouses, stores, staff, accounting, logistics, and management.
People are asked to register as an FOP “for convenience” or “to simplify work.” After that, they may hand over access to their bank accounts, conduct no real business activity, and effectively remain regular employees. At the same time, these are the people officially responsible for cash flows, tax reporting, and financial operations.
To detect such schemes, ESBU analyzes large amounts of information from state registries, tax databases, banking transactions, and other data sources.
After detecting a risk of artificially splitting a large business into an identified group of FOPs, the information is subjected to additional analytical review. ESBU compares data from different sources and analyzes financial links between the scheme participants, the structure of cash flows, and the volume of business operations.
This approach makes it possible to establish the actual structure of the business, identify the scheme organizers, estimate the scale of tax evasion, and calculate potential losses to the state budget.
The use of analytical tools and Big Data significantly reduces the time needed to detect such schemes. In the past, collecting information required long audits and manual analysis of large volumes of documents. Now, the system allows for the automatic detection of a significant share of risks.
After analytical confirmation of the information, ESBU documents the facts of illegal activity, carries out the necessary legal procedures, and takes steps to recover the damages caused to the state.
Detecting business “splitting” schemes is part of ESBU's systematic work to formalize the shadow economy and create a level playing field for honest businesses that operate transparently and pay taxes in full.