Retail chains and "business fragmentation": State Tax Service revealed tax evasion schemes worth more than 1 billion UAH

Press service of the State Tax Service of Ukraine, published 03 February 2026 at 11:04 Chapter: News

Employees of the State Tax Service have identified 10 well-known retail chains that used so-called "business fragmentation" schemes. Possible tax evasion amounts to at least 1 billion UAH.

These are the retail chains that sell household appliances and electronics, clothing, footwear and food products. They have involved more than 800 individuals-entrepreneurs in the scheme.

Use of "business fragmentation" has no business purpose and is used solely to minimize tax liabilities. It is an artificial division of large or medium-sized profitable companies into dozens or hundreds of individuals-entrepreneurs who operate on a simplified taxation system. 

This approach allows formally staying within the established income limits and avoid paying taxes in full.

In practice, after one individual reaches income threshold of relevant single tax payer group, another entrepreneur is introduced into the scheme. At the same time, business continues to operate as a single network – with the same retail premises, staff, products and brand.

Materials on the identified facts have been transferred to the Bureau of Economic Security of Ukraine, which is currently conducting the pre-trial investigations.