Ukrainian agencies have been instructed to strengthen counteraction to artificial business splitting. According to the Ministry of Finance, large networks distribute turnover among dozens and hundreds of individual entrepreneurs to evade VAT. Cooperation of several sole proprietors in itself is not considered a violation.
The Ministry of Finance reported on the results of the interagency working group meeting on de-shadowing the economy on the government portal on October 31. The discussion was attended by representatives of the government, the Bureau of Economic Security, the National Police, tax and customs services.
Identifying and suppressing artificial splitting schemes, as well as bringing those involved to justice, is tasked to the law enforcement system. The State Tax Service, together with customs and the BEB, will also strengthen work with high-risk taxpayers.
The essence of splitting lies in the difference between business registration and its actual operation. As the tax service explains, a single economic process is artificially distributed among entrepreneurs who are formally independent but act as one company. Such a structure can be used for unjustified application of the simplified system, evasion of VAT registration, or concealment of actual income volumes.
During analysis, the tax service considers a set of circumstances: common management, personnel, trading premises and warehouses, a single brand, accounting support, and distribution of income without an economically justified business purpose.
However, the presence of several entrepreneurs in itself does not prove a violation. The STS clarification emphasizes: it is necessary to establish the artificial nature of the division for tax benefit without real economic substance. Separate registrations and reporting also do not replace the assessment of actual independence of the participants.
If violations are confirmed, additional tax assessments, fines, and penalties are possible, and in cases provided by law — loss of the right to the simplified system. These consequences depend on the established circumstances, not just on the number of sole proprietors in the network.
The BEB separately draws attention to the risks for people who are asked to register as sole proprietors and provide access to accounts, although they do not conduct independent business. Formally, the responsibility for the movement of funds, reporting, and financial transactions remains with these entrepreneurs.
Another direction of the instructions is counteraction to illegal import under the guise of humanitarian aid. The authorities intend to change its customs clearance so that aid reaches recipients faster and is not used as a cover for commercial supplies.
The published statement does not announce new tax rates or audits of all sole proprietors. Specific deadlines for control measures are also not specified.
Based on materials: Ministry of Finance — Government Portal, STS in Mykolaiv Oblast, Bureau of Economic Security
