Illegal formation of the VAT tax credit on tobacco market totaling 2 billion UAH was prevented

Press service of the State Tax Service of Ukraine, published 17 December 2020 at 12:56 Chapter: News

STS exposes illegal actions of business entities that illegally form the VAT tax credit by fictitious purchase, storage and sale of the wholesale consignments of tobacco products.

Such business entities are involved in the supply chains from legal tobacco producers. To do this, they obtain licenses for the wholesale and retail sale of tobacco products, register storage in the Unified State Register, rent for a short period of time, submit reports and even pay minimum taxes. At the same time, operations are fictitious and carried out only on “paper”.

State Tax Service of Ukraine exposes risky operations and applies existing mechanisms that terminate these activities, using its own electronic services.

 To destroy this scheme during 2020, simultaneous audits were carried out at 438 places of storage and trade. According to the audit results, it was established that the activity is not carried out at all at 169 places and presence of 269.5 million packs of cigarettes worth 12.1 billion UAH, including the VAT of 2 billion UAH is not confirmed.

As follows, measures taken by the STS resulted in prevention of illegal formation of the VAT tax credit totaling about 2 billion UAH.

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