Owner of One of the Largest Cosmetics and Household Chemicals Businesses in a Belarusian Region Suspected of Tax Evasion and Tax Fraud

The regional office of the Financial Investigation Department of the State Control Committee of the Republic of Belarus has established that, in order to unlawfully minimize tax liabilities, the owner of the business registered affiliated shell companies abroad, which were used to conduct supplies to foreign business entities and to purchase cosmetics and household chemical products from them.

On the one hand, fictitious transactions with controlled companies were used to artificially understate revenue from the export of products. According to falsified documentation, goods from Belarusian entities were transferred to «shell companies» at cost price and subsequently resold by them to foreign buyers at significantly higher prices.

On the other hand, when purchasing goods abroad for further supply to the Republic of Belarus, costs were artificially overstated: the accounting records of Belarusian companies reflected purchases from the same controlled entities at inflated prices.

In reality, all deliveries and shipments were carried out directly.

These documentary manipulations enabled the business owner, over a prolonged period, to understate revenues and inflate expenses, resulting in unpaid taxes exceeding 1,2 million belarusian rubles.

In addition, the concealment of the actual value of goods sold and purchased enabled the businessman to unlawfully obtain refunds from the state budget of the difference between VAT deductions and the total VAT assessed on sales, amounting to more than 670 thousand belarusian rubles.

Criminal proceedings have been initiated against the business owner on the facts of tax evasion and tax fraud. Assets have been seized to secure compensation for the damage caused. The suspect is taking measures to compensate the losses.