Imported bicycles, but sold gravel: revealed VAT refund fraud scheme.

The Ukrainian press service of the Bureau of Economic Security reported that 10 business entities were found to be fraudulently selling construction materials to each other to evade taxes. They declare stocks of goods that are not related to their main activity. The companies share common property and founders.

According to the Bureau, the business entities increased the volume of goods with each new sale. They used a tax credit generated by the import of general consumption goods to avoid paying taxes.

The scheme involved importing bicycles, footwear, clothing, or toys to create a tax credit. Meanwhile, in Ukraine, construction materials were also purchased. Then these goods were fictitiously sold between companies, and their volumes increased to cover up illegal activities. Imported goods still remained in the companies' warehouses.

«For example, one of the mentioned construction companies currently has 4,650 bicycles in stock with a total customs value of almost 13.6 million UAH», - noted in the report.

Analyzing tax data, experts from the Bureau of Economic Security found that these companies did not declare the sale of imported goods. This indicates that sales might have been carried out for cash without fiscal control.

According to analysts' estimates, these operations likely evaded over 26 million UAH in taxes. The case has now been transferred to the detective unit of the Bureau of Economic Security and the State Tax Service of Ukraine.

Earlier it was reported that the ex-director of the Kharkiv defense plant was exposed in embezzlement of funds.