A company selling new and used cars turned to the Business Ombudsman Council for help.
According to the complaint, the Territorial Department of the Bureau of Economic Security (BES) was investigating an alleged case of tax evasion by the company’s officials in the amount of almost UAH 18 million for the period 2023–2024. The accusation was based on claims that the company concealed the actual value of sold goods — namely, used cars.
Law enforcement authorities argued that the company sold used cars at prices 4 to 50 times higher than those indicated in tax invoices. The BES reached this conclusion by comparing the data from the tax invoices with the prices listed in online sale ads for the same cars on AUTO.RIA.
The company explained that the vehicles in question were taken on commission for resale. Therefore, under paragraph 189.3 of Article 189 of the Tax Code of Ukraine, the VAT base is not the full price of the car but the amount of the commission fee. The company acted in full compliance with this rule.
This position was also confirmed by the State Tax Service, which conducted a scheduled audit of the company for the period 2018–2024 and found no violations corresponding to those cited by the BES.
The Business Ombudsman Council sent written appeals to the Territorial Department of the BES, the central BES of Ukraine, and the Office of the Prosecutor General. In its appeal, the Council emphasized the need to assess the proportionality of interference in the company’s business activities and the appropriateness of initiating criminal proceedings in cases where tax matters had already been reviewed and confirmed lawful by the competent authorities.
As a result of the Council’s intervention, the criminal proceedings were closed due to the absence of any criminal offense.
After the case was resolved, the company expressed its gratitude to the Council:
“Thanks to the Council’s intervention, a lawful and well-grounded decision was finally made in the criminal case. We now have, thanks to you, officially confirmed information regarding this outcome! Once again, the Council proves its high efficiency and unquestionable authority in protecting the legitimate rights and interests of businesses. Thank you very much!”
