ESBU detectives in the Chernivtsi region expose a UAH 5 million tax scheme involving split PE entities

 Detectives of the Territorial Office of the Economic Security Bureau of Ukraine in the Chernivtsi region exposed an individual entrepreneur who organized a tax evasion scheme by "splitting" PE entities. The individual provided international transportation services for various goods using trucks. These actions resulted in an estimated UAH 5 million in unpaid taxes to the state budget.

The investigation established that in order to conceal actual profit volumes and maintain a simplified taxation system, the individual applied a "business splitting" mechanism. For this purpose, company employees were fictitiously registered as private entrepreneurs.

Non-cash funds for transportation services were transferred to the accounts of these controlled individual entrepreneurs. This allowed the businessman to remain on the simplified taxation system. Instead of the 18% profit tax required by law, he paid taxes at a reduced rate.

Currently, the individual has entered into a plea agreement with the investigation and has begun compensating the damages caused to the state.

The pre-trial investigation is ongoing into signs of a criminal offense under Article 212 of the Criminal Code of Ukraine (intentional tax evasion).

Operational support is provided by officers of the SSU office in the Chernivtsi region. Procedural guidance is carried out by the Chernivtsi Regional Prosecutor's Office.