“Soybean yields in an underground parking lot: how tax authorities detect “gray” grain export schemesHow tax authorities detect “gray” grain export schemes.”, — write: unn.ua
Details
According to the State Tax Service, in recent years, there has been a problem with exports of agricultural products and processed products of unspecified origin, i.e., whose origin could not be traced back to the supply chain. As a result, the budget has been losing revenues in the form of tax payments and the return of foreign currency earnings.
In December 2024, the “export security regime” was reportedly introduced, which changed the rules for exporting agricultural products and products of their processing – now they can be carried out exclusively by entities registered as VAT payers, and all supply chains are checked before the products are exported from the territory of Ukraine. This has made it possible to effectively prevent the implementation of fraudulent transactions.
“However, there are entities that are still trying to register tax invoices for transactions on the “export” of agricultural products and products of their processing, ignoring the rules of this system,” the State Tax Service said.
Vivid “cases” of attempts to register tax invoices of goods without origin
Company A decided to “test” the system by trying to register export invoices for 46 tons of soybeans at the expense of the tax limit formed as a result of the purchase of parking spaces in Kyiv and parking maintenance services. The registration of the invoices was suspended. However, thanks to this bold attempt, it is now known that the average “yield” of soybeans in the underground parking lot is 1.7 tons per square meter.
Company B imported fruits, vegetables, fish, and meat, but also tried to export soybeans. The system stopped this attempt.
Company B tried to register export invoices even though it had no bank accounts, land, goods or fixed assets and did not pay taxes. The system automatically blocked the export tax invoice for a batch of sunflower oil worth UAH 5.7 million.
Company G filed a tax invoice with the product nomenclature “Soybeans”, but the product code corresponding to wheat. The tax invoice for a batch of 24500 kg was suspended. The monitoring found that the company had purchased neither soybeans nor wheat. The company also had no information on the origin of the goods, no tax payments, fixed assets, or land.
The State Tax Service named typical attempts to circumvent the export security regime:
- registration at the expense of the established limit in the SEA of VAT on food imports;
- registration of VAT on transactions for the purchase of fixed assets on the domestic market that have nothing to do with transactions with agricultural goods at the expense of the established limit in the SEA;
- substitution of the nomenclature that does not correspond to the UKTZED code in the tax invoice;
- lack of any background and even open bank accounts;
- registration of 1 ton of produce in the absence of its purchase, production, and history of transactions with agricultural products;
- 12 DGSs, which have been at risk since 2020-2023, also tested this system.
“All of these attempts were stopped by the current export security regime,” the STS emphasized.
The agency recalled the basic rules of the “export security regime”:
1) only entities registered as VAT payers may export such products;
2) customs clearance of an export transaction begins after the tax invoice is registered in the URTI, which is monitored for three business days;
3) the analysis of the origin of such products, declaration and payment of supply chain taxes shall be carried out before the actual export of such products from the customs territory of Ukraine;
4) the zero VAT rate on such transactions shall be applied only to those entities whose return on foreign currency earnings for the previous 12 months is at least 80%. Other entities will have this right only after the return of foreign currency earnings on these transactions;
5) unconditional registration of tax invoices was introduced for entities that have a positive history of export operations with the origin of their products, have been registered as VAT payers for at least a year and submit reports on time, have land, declared employees with proper wages, have no tax debts, and are not in the process of liquidation.
“As of today, more than 1,000 entities have already used this regime and registered more than 11,000 tax invoices,” the statement said.
TOP 5 products:
- corn – 1,718 TI/CC in the amount of 5 504.9 thousand tons for a total amount of UAH 45,935.5 million;
- sunflower oil – 3,822 TI/CC in the amount of 804.5 thousand tonsn for a total amount of UAH 37,734.9 million;
- wheat – 982 TI/CC in the amount of 2,185.3 thousand tonsn for a total amount of UAH 19,128.3 million;
- soybeans – 1,045 TI/CC in the amount of 596.5 thousand tonsn for a total amount of UAH 9,739.3 million;
- rapeseed – 230 MN/RC in the amount of 245.1 thousand tonsn for a total of UAH 5,440.5 million.
“It should be noted that today 712 TI/CCs in 218 STS for a total amount of UAH 98.8 billion are in the status of ‘canceled TI/CC registration in accordance with subparagraph 97.2 of paragraph 97 of subsection 2 of section XX ’Transitional Provisions” of the Tax Code”. Of these, 419 TI/CCs in 150 STS for a total amount of UAH 96.6 billion were submitted for registration in the period from 02-06.12.2024″, the STS said.
The State Tax Service reportedly monitors such transactions on an ongoing basis not only for the exporting entity but also for its supply chain. “Only honest declaration, payment of taxes and return of foreign currency earnings are the key to registering a tax invoice for the purpose of further export of such goods outside the customs territory of Ukraine,” the agency emphasized.
For reference
During 2022-2024, the STS reportedly identified transactions of more than 1.5 thousand entities that carry out customs clearance of goods in the “export” mode and, according to the STS IS, have no information on the origin of exported goods, no tax payments, no fixed assets and land, no bank accounts, etc.
The State Customs Service and the BES were notified of the above-mentioned entities for taking measures within their competence.
The rules of operation of the export security regime mentioned in the notification are regulated by Art. 19 para. 2 of the Law of Ukraine “On Foreign Economic Activity” and the Resolution of the Cabinet of Ministers of Ukraine No. 1261 “On the Introduction of the Export Security Regime” dated 29.10.2024.