The business community is seeing tangible progress in its long-standing call to stop the artificial fragmentation of large companies into hundreds and thousands of sole proprietors (FOPs) to avoid paying taxes.
The recent investigation by the Economic Security Bureau of Ukraine (ESBU) on a major regional retail chain in the Poltava region demonstrates that the issue is being addressed in practice. According to the ESBU, the chain operated more than 400 stores across seven regions and involved over 3,500 FOPs in a scheme designed to minimize tax liabilities and avoid the taxation applicable to legal entities.
AmCham Ukraine has repeatedly emphasized that business fragmentation schemes distort competition, deprive the State Budget of critical revenues, and create unfair pressure on bona fide companies that operate transparently and pay taxes in full. Effective enforcement against such practices is essential to ensuring a level playing field, strengthening investor confidence, and demonstrating Ukraine’s commitment to combating the shadow economy.
AmCham Ukraine is grateful to the ESBU for the practical steps taken to counter artificial business fragmentation schemes and looks forward to further systemic results in the areas of economic de-shadowing, ensuring a level playing field, and combating tax evasion.
