VAT evasion scheme in Yabko and Yabluka retail chains

The State Tax Service of Ukraine has criticised two well-known electronics retail chains – "Yabko" and Yabluka – for evading value added tax (VAT). The audit revealed numerous violations, including sales without the use of cash registers and the lack of proper accounting for goods and documents confirming the origin of the equipment.

Widespread violations and forged receipts

According to Ruslan Kravchenko, head of the State Tax Service, serious violations were detected during control purchases. Out of 150 inspections, tax officers encountered forged receipts on 22 occasions. As a result, thanks to the constant presence of tax officers, sales in stores have noticeably increased, leading to fines for taxpayers totalling more than 85 million hryvnia after the completion of over 400 inspections.

Artificial splitting of sales and manipulation with sole proprietors

Tax officers also discovered that both chains used a scheme of artificially splitting sales to reduce tax liabilities. This resulted in VAT evasion amounting to more than 286 million hryvnia. 

The chains engaged up to 300 related individual entrepreneurs (sole proprietors) operating under the simplified tax system. A total of 170 such entrepreneurs were identified, with combined income of 1.72 billion hryvnia.

Currently, both companies have ceased operations under the simplified tax system and switched to the general system, becoming VAT payers.