Detectives from the Bureau of Economic Security of Ukraine uncovered a large-scale tax evasion scheme in the used clothing trade. According to investigators, one of the most well-known second-hand networks — EconomClass, which has been operating in the market since 2005, organized a system of income shadowing through artificial “splitting” of the business. As a result, the state lost over 38.6 million UAH in taxes.
This is reported by Finway
Essence of the scheme using individual entrepreneurs
The investigation established that the EconomClass network actually functioned as a single company with centralized management and financial control. However, legally, sales were made through an extensive network of more than 530 controlled individual entrepreneurs (IEs), who operated under a simplified taxation system.
The main mechanism of tax evasion was that the income of each entrepreneur was artificially limited to avoid exceeding the thresholds for the simplified system. When the income of a particular IE approached the limit, the company did not transfer it to the general taxation system as required by law, but divided the income among other controlled IEs. This allowed for a significant reduction in tax burden.
Volumes of financial operations and results of searches
According to estimates by the Bureau of Economic Security analysts, only with the participation of 23 IEs, financial operations worth over 231 million UAH were conducted in 2023-2025. As a result of this scheme, the budget of Ukraine did not receive at least 38.6 million UAH in value-added tax (VAT).
“SBI detectives have already conducted 23 searches in the Rivne, Volyn, Vinnytsia, Kyiv, and Khmelnytskyi regions, both in the network’s stores and at the residences of the suspects. During the investigative actions, law enforcement seized information carriers regarding the financial and economic activities of over 530 IEs for the years 2024-2026. Currently, the pre-trial investigation is ongoing.”
Previously, SBI employees had already uncovered illegal production and sale of electronic cigarettes.