ESBU in the Lviv region secured the reimbursement of UAH 5.8 million in taxes and liquidated a «business splitting» scheme

 Detectives of the Territorial Office of the Economic Security Bureau of Ukraine in the Lviv region have ensured the recovery of UAH 5.8 million in unpaid taxes to the state budget.

The investigation established that an individual entrepreneur engaged in the manufacturing of footwear and leather goods at his own production facilities and utilized a «business splitting» scheme.

The manufactured products were sold through a network of controlled individual entrepreneurs operating under the simplified taxation system. The goods were sold across more than 40 retail outlets, as well as via the internet and social media.

Payments were accepted both in cash and via non-cash transfers to the bank cards of controlled individuals. At the same time, actual income was not reflected in tax or accounting records.

As a result of these actions, tax liabilities were understated, leading to a loss of UAH 5.8 million to the budget.

During the investigation, ESBU detectives not only ensured the recovery of the damages caused to the budget but also liquidated the business-splitting mechanism; the individual entrepreneurs have transitioned to the general taxation system.

A motion has been filed with the court to discharge the individual from criminal liability in accordance with Part 4 of Article 212 of the Criminal Code of Ukraine.

Procedural guidance in the criminal proceedings was provided by the prosecutors of the Lviv Regional Prosecutor's Office.