Employees of the Department of Information Analysis and Risk Management have exposed a number of companies that have set up a scheme to minimise rent payments for the use of subsoil for the extraction of minerals.

The ESBU analysts found that subsoil users, in order to reduce the amount of tax, used the prices of minerals sold to a related business entity, which are significantly lower than the market prices, when calculating the tax liability on rent.

Such actions allow for systematic manipulation of the provisions of the Tax Code of Ukraine and minimisation of the rent payment. This, in turn, leads to budget losses in the form of unpaid payments for subsoil use.

The potential risk of budget losses is over UAH 1.1 billion.

To eliminate the scheme, the ESBU analysts prepared proposals to amend the legislation and sent recommendations to the relevant committee of the Verkhovna Rada of Ukraine, the Ministry of Economy and the Ministry of Finance.

As a result, the Parliament adopted a law that sets minimum prices for the supply of commercial products by mining companies.