State Tax Service detected unrealistically low revenues in catering establishments

State Tax Service detected that some catering establishments are showing unrealistically low revenues. Some restaurant business entities declare up to 50 thousand UAH per month. This was shown by activities analysis of business entities operating in the catering sector – restaurants, cafes, bars, conducted by the State Tax Service.  

According to the tax authorities, such figures are economically unjustified. Even a small establishment usually requires at least three employees – a cook, a waiter and a bartender. At the same time, according to legislation, salary of each of them cannot be less than 8 thousand UAH.

In addition to labor expenses, owners of such establishments are required to:

- purchase license for the retail sale of alcohol;

- maintain premises;

- purchase products;

- provide for other expenses for maintaining the business;

- pay taxes.

In addition, some restaurateurs declare only non-cash transactions or cash payments in which they are insignificant – up to 5% of total revenues.

As a result, it is obvious that with declared revenues of up to 50 thousand UAH, no establishment would be able to actually function. 

This harms not only the state budget, but also the business itself, as risky establishments come under increased control.

State Tax Service draws attention of entrepreneurs to the need for conscientious compliance with tax legislation. All settlement transactions must be carried out through registrars of settlement operations in full. 

It should be emphasized that the State Tax Service carries out tax control taking into account decision of the National Security and Defense Council to introduce legal and organizational measures regarding moratorium on groundless audits and interference by the state bodies in business activities, and exclusively taking into account a risk-oriented approach and in the presence of high levels of risk.