Second-hand retail chain "split" through 530 sole proprietors: ESBU exposes over UAH 38 million tax evasion scheme

 Detectives of the Main Detective Department of the Economic Security Bureau of Ukraine have uncovered a large-scale business-splitting scheme in the second-hand retail sector. To minimize tax liabilities, the retail store chain's operations were registered under more than 530 controlled sole proprietors operating under the simplified tax system. Estimated budget losses amount to over UAH 38.6 million.

The investigation established that the second-hand chain actually operated as a single company with centralized management and shared control over financial and economic activities.

However, officially, the goods were sold through dozens of sole proprietors registered in different regions of Ukraine. After exceeding the allowable income limits, the entrepreneurs were not transferred to the general tax system as required by law. Instead, they continued to be used to split the business and reduce the tax burden.

Analysts established that between 2023 and 2025, 23 sole proprietors were involved in the scheme, through whom financial transactions worth over UAH 231 million were conducted. According to preliminary estimates, these actions could have resulted in the budget losing more than UAH 38.6 million in VAT.

The ESBU detectives conducted 23 searches across the Rivne, Volyn, Vinnytsia, Kyiv, and Khmelnytskyi regions. These took place at business locations, residences of the suspects, and premises potentially used to coordinate the retail chain's operations.

Among the seized items were data storage devices detailing the activities of over 530 sole proprietors for the years 2024–2026. This data may indicate systemic business splitting and the use of controlled entrepreneurs to minimize taxes.

The pretrial investigation is ongoing. Operational support is provided by officers of the Strategic Investigations Department in the Khmelnytskyi region of the National Police of Ukraine, under the procedural guidance of prosecutors from the Prosecutor General's Office.