Main points
- A “business fragmentation” scheme was exposed in western Ukraine, which allowed a supermarket chain to avoid paying taxes in the amount of over 23.7 million hryvnias.
- After the investigation, the business was merged into one company, transferred to a common taxation system, and the employees were officially registered.
Supermarket chain illegally “split” into sole proprietorships / finclub.net
A scheme that allowed businesses to save on taxes for years has been exposed in western Ukraine. A well-known network used a well-known scheme that worked in several regions at once – business fragmentation.
How was tax evasion uncovered?
Detectives in the Chernivtsi region investigated the case. According to their data, the owner of the chain organized a scheme of so-called “business fragmentation” to avoid paying taxes, the Bureau of Economic Security reported.
In fact, one business was artificially divided into many sole proprietorships. Some employees and management were involved in the process – they controlled finances and kept “black” accounting.
The main goal was not to exceed the established income limits for the simplified system. This allowed avoiding VAT payments and significantly reducing the tax burden. The network operated in Chernivtsi, Ternopil, and Khmelnytskyi regions, but legally appeared as independent entrepreneurs.
According to the results of the examination, in just nine months of 2025, the budget was short by more than 23.7 million hryvnias.
After the investigation, the businessman abandoned the scheme:
- the business was merged into one company (LLC);
- activities were transferred to the general taxation system;
- employees were officially registered, instead of the model with sole proprietors.
How does the scheme work?
Business fragmentation schemes allow entrepreneurs not to show the entire turnover. Economist Oleg Getman and tax consultant Mykhailo Smokovich told this in comments to Channel 24 .
Large business fragmentation schemes are particularly common in retail and food service. They become noticeable when a supermarket or restaurant issues multiple payment receipts.
Oleg Getman
Economist, coordinator of expert groups of the Economic Expert Platform
All these splitting schemes in restaurant and retail chains are built on the fact that they are not just split into individual entrepreneurs, but also individual entrepreneurs do not issue the vast majority of fiscal checks. That is, they do not show their turnover and thanks to this they can continue to exist as individual entrepreneurs. If you force them to show all their turnover, then the splitting scheme becomes almost uninteresting. Because the limits will end in a month or a few weeks. Too many of them will have to be changed, so it will be more profitable to switch to a common system.
To combat the business fragmentation scheme, the Ukrainian tax service needs a reboot. To do this, they need to pass bill No. 9243, but its consideration is being postponed. Tax consultant Mykhailo Smokovich also believes that the tax service currently does not have enough resources to expose the schemes , so it should be given more opportunities.
Mykhailo Smokovich
Accountant, tax consultant
The tax office should detect such cases, but its tools are limited. If detected, it can interpret this as a fragmentation of the business and try to collect all these individual entrepreneurs together in the acts. And all the turnover that went through this store should be taxed not under the simplified system, as the company did, but under the general system. But here it is very difficult for the tax office to collect everything together, detect and hold the company itself accountable.
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