BEB has referred to court a case on business splitting through sole proprietors

The Bureau of Economic Security has announced the referral to court of a criminal case concerning a scheme in which, according to the investigation, business activities were artificially distributed among several sole proprietors (FOPs) in order to minimise tax liabilities.

According to BEB, this activity resulted in more than UAH 71 million of income being concealed. During the pre‑trial investigation, the person involved reimbursed UAH 10.6 million in taxes to the state budget.

At the same time, it is important to understand that working through several FOPs in itself is not a violation of the law. Many Ukrainian companies use this model entirely lawfully.

Problems arise when law‑enforcement and supervisory authorities believe that the actual way the business operates does not correspond to its legal structure. In such situations, businesses may face tax audits, additional assessments, searches and criminal proceedings.

Every business structure is individual. What is safe for one enterprise may pose significant risks for another. That is why corporate and tax structures should be reviewed before questions arise from BEB, the State Tax Service or other law‑enforcement bodies.

Law Firm WINNER provides services for proper business structuring, legal and tax audits of business models and helps minimise the risk of claims from BEB, the State Tax Service and other authorities.

Author – Maksym Bahniuk, Head of Tax and Customs Law Practice at Law Firm “WINNER”.
Contact us: 📞 096 574 81 02, 📧 info@uk-winner.com

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