Millions of Rubles in Concealed Revenue and Unpaid Taxes. Criminal Cases Initiated Against Belarusian Business Owners Engaged in Tulip Cultivation

The Financial Investigation Department of the State Control Committee of the Republic of Belarus has uncovered and suppressed the illegal activities of one of the country’s largest importers and wholesale distributors of tulips. The business owners are suspected of tax evasion, selling products at artificially understated prices, and tax fraud.

It was established that a peasant farm enterprise (PF) in one of the regions of the Republic of Belarus, alongside agricultural production activities, was also engaged in the cultivation and sale of tulip bulbs while applying the unified tax regime for agricultural producers (1% of gross revenue).

One of the conditions for applying this special tax regime was that revenue from the sale of agricultural products produced by the PF had to account for at least 50% of the enterprise’s total revenue.

However, by 2022, revenue generated from tulip sales had already exceeded revenue derived from agricultural production. In response, the head of the PF, together with his deputy (who was also a co-owner of the business), registered an affiliated company to which part of the tulip sales revenue was artificially transferred. The newly established company was formally headed by the PF’s driver.

As a result of the unlawful redistribution of revenue and understatement of the tax base, the amount of unpaid taxes for the period from 2022 to 2025 exceeded 1,3 million belarusian rubles.

In addition, large-scale concealment of revenue received from tulip bulb sales was uncovered. The products were sold for cash, while the accounting records of the PF reflected amounts understated by more than twenty times. An examination of seized informal accounting records established that, over the past two years alone, more than 10 million belarusian rubles had been concealed from taxation.

Facts of tax fraud were also identified. In order to obtain VAT refunds from the state budget totaling more than 950 thousand belarusian rubles, the business owners submitted fictitious documents to the tax authorities claiming that the affiliated company had allegedly purchased tulips from the PF at understated prices and subsequently sold them to foreign buyers. In reality, the affiliated company did not participate in these transactions. In addition, the quantity and value of tulip bulbs sold by the PF to individuals were deliberately understated.

The timely intervention of officers of the Financial Investigation Department prevented the suspects from fully implementing their scheme.

Criminal proceedings have been initiated against the business owner (the deputy head of the farm), the head of the peasant farm enterprise, and the director of the affiliated company.

Assets belonging to the suspects, including four apartments and ten vehicles, have been seized. Authorities also discovered and confiscated 440 thousand euros and 89 thousand USD.

The suspects have confessed to the offenses.