The BES reveals schemes of unlawful use of tax benefits

Representatives of the Bureau of Economic Security of Ukraine joined the discussion of the problem of unlawfully claimed budgetary reimbursement by enterprises founded by public organizations of persons with disabilities and subject to a zero rate of value added tax on business transactions.

The meeting was chaired by Iryna Vereshchuk, Vice Prime Minister of Ukraine, Minister for Reintegration of the Temporarily Occupied Territories of Ukraine.

The meeting discussed, among other things, the necessary changes to the legislation to strengthen control over enterprises eligible for the benefit.

Since from the beginning of 2022 to July 2024, 32 business entities with risky characteristics applied for UAH 1.18 billion in reimbursement. This is 87% of the total amount claimed for VAT refund by all companies using the aforementioned benefit.

In total, according to the BES analysts, 132 enterprises founded by public organizations of people with disabilities carried out economic activities during this period.

Their financial transactions amounted to UAH 7.86 billion. Therefore, due to the negative VAT value, 132 enterprises claimed UAH 1.35 billion for refund, of which UAH 391.9 million has already been reimbursed by the state.

According to Andriy Pashchuk, Deputy Director of the BES, analysts have identified several common signs of riskiness of such companies. These include the employment of the same people in different regions, the minimum wage rate, cashing out VAT refunded by the state, etc.

For example, a company imports second-hand clothing and sells it for cash. At the same time, it is documented that employees pack, hem, or iron these clothes.

In turn, an analysis of the documents on the economic activities of these enterprises shows that one employee with a disability processes 680 kg of clothing per day, which is physically impossible. Thus, only an imaginary production process is created.

However, the company later applies for a VAT refund that was generated during the import of goods and receives funds from the state, which it cashes out.

At the end of the meeting, representatives of civil society organizations supported the BES's position on the necessary legislative changes and suggested holding a series of working meetings.