NABU prevented illegal refund of UAH 674 million of VAT

The National Bureau, together with the State Tax Service and the State Border Guard Service in Odesa Region, have prevented the illegal refund of UAH 674 million of value added tax to companies involved in a corruption scheme for importing and customs clearance of goods in Ukraine.

Relevant evidence was obtained as a result of 39 searches of warehouses conducted during December 2020 - February 2021 (the last search took place on February 16, 2021). The NABU Detectives established not only the absence of goods at the warehouses, where according to the documents they should have been stored but also the unsuitability of these premises for storage of these goods. Therefore, there are no grounds for VAT refunds to the abovementioned companies.

These are 20 companies controlled by one group of people, whose fraudulent activities have been investigated by the NABU Detectives since the fall of 2017. The companies imported and sold goods in Ukraine, but did not state the relevant information in tax accounting. They then claimed VAT refunds deliberately submitting untrue information that the goods allegedly had not been sold and were in storage.

The episode, in which the loss of UAH 674 million from the budget was prevented, has been investigated by the NABU Detectives since August 2020. The evidence gathered by the National Bureau comes as an important basis for defending the interests of the state in lawsuits for the additional refund of previous illegal reimbursement of about UAH 300 million of VAT.

After the first round of searches at the end of 2020, one of the companies refused compensation of UAH 87 million from the state budget. The investigation in this, as well as in a number of other proceedings on the facts of abuse in the import and customs clearance of goods in Ukraine continues.

Removing the grounds for such abuses requires amendments to a number of legislative acts. NABU sent its proposals in this regard to the Cabinet of Ministers in August 2020.

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