No more “blind spots” between the border and registration: ESBU, STS, and MIA merge data to bring the auto import market out of the shadows

 The Economic Security Bureau of Ukraine, jointly with the State Tax Service and the Main Service Center of the Ministry of Internal Affairs, has launched an analytical tool that allows for the detection of tax evasion during the import and sale of cars.

The Director of the ESBU, Oleksandr Tsyvinskyi, announced this on his Telegram channel.

“True de-shadowing begins not where the state catches up with crime, but where it outpaces it. Our task is not only to investigate the consequences of schemes but also to build a system in which these schemes have no place to arise,” he noted.

Bureau analysts recorded a scheme where companies import cars into Ukraine but fail to declare their subsequent sale to the final owners.

The vehicle is actually purchased by an individual, while the importing company handles its importation and customs clearance. After the car is registered to the buyer, the tax invoice for the sale is not registered.

As a result, the budget is deprived of proper tax revenues, and the VAT input tax credit generated during import can be used in other tax evasion schemes.

To promptly detect such facts, the ESBU, STS, and MSC of the MIA have established an information exchange system. Analysts gained the capability to cross-reference data regarding the importation of a car, the registration of the tax invoice for its sale, and the registration of the vehicle to the final owner at an MIA service center.

If a vehicle has already been imported and registered but its sale is not reflected in the tax accounting, this inconsistency immediately comes to the attention of analysts for further action.

The practical working mechanism of the new tool was agreed upon during an interagency meeting attended by the First Deputy Director of the ESBU, Taras Shcherbai; the Head of the Analytical Department of the ESBU, Kostiantyn Posvaliuk; the First Deputy Head of the Main Service Center of the MIA, Ruslan Zhuk; as well as other representatives of the MSC of the MIA and the STS.

The next step is the mandatory inclusion of the car's VIN code in the tax invoice.

This will improve the efficiency of tracking vehicle movements from the moment of their importation to registration to the final owner, as well as introduce a mechanism to prevent the illegal activities of dishonest auto importers who systematically fail to register tax invoices for sold cars.

The joint tool of the ESBU, STS, and MIA will block schemes involving tax credit manipulation, reduce the shadow segment of the auto import market, and ensure tax payments to the budget.