According to the results of information and analytical work using a risk-oriented approach the Economic Security Bureau of Ukraine identified a number of enterprises with a potential risk of illegal reimbursement of value added tax (VAT) in the amount of more than UAH 210 million.

In order to prevent the waste of public funds, employees of the ESBU sent recommendation letters about the identified risks and the need for control and verification measures to the State Tax Service of Ukraine (STS).

Subsequently, 7 business entities independently refused VAT reimbursement in the amount of UAH 38.1 million.

In addition the STS based on the results of control measures, refused to reimburse VAT to other enterprises in the amount of UAH 172.5 million.

Among these business entities are enterprises that use the VAT exemption by fictitiously employing people with disabilities.

The analysts of the ESBU found that these companies imitate the production process. In fact they formalize import operations on their own behalf as well as through commission agent companies, to import goods into the customs territory of Ukraine. Subsequently, these goods are delivered to real business entities that sell them through their own retail networks.

Importing companies, using the privileges illegally generate a negative value for VAT and apply for its refund. (According to Ukrainian legislation, companies employing people with disabilities are exempt from paying VAT and are entitled to a refund.)

Thus thanks to the recommendations of the analysts of the ESBU more than UAH 210 million of budget funds were saved in May 2023.