The use by businesses of venture funds or holding companies registered offshore does not violate current legislation. Deputy Head of the Presidential Office Rostislav Shurma stated this in an interview with Interfax-Ukraine, answering a question about the structure of his brother’s business, which uses offshore companies or so-called internal offshores in the form of venture funds to optimize the tax burden.
“As for my brother’s business, it is entirely built on the principles of legality and on all high moral standards,” the official emphasized.
“As for business structuring in Ukraine, if you look at the corporate structure of large businesses, 99% of large businesses in Ukraine are structured through funds or holding companies. This is standard ownership and corporate governance practice in Ukraine. And this is how my brother’s business is structured,” added Shurma.
He assured that the use of such schemes does not violate current legislation. “As for paying taxes, my brother’s companies pay hundreds of millions of hryvnia in taxes annually, and everything else is just manipulation and distortion of facts. There is no violation of the law or moral standards there,” Shurma said.
At the same time, he admitted that the use of such schemes allows businesses to reduce their tax burden. “Why do small businesses very often use individual entrepreneurs to pay for labor without paying full taxes? Because the law provides such opportunities. Why does a business structure its assets through investment funds or through a holding company? Because the law provides such opportunities. But the tax reform that our team proposes just speaks of uniform rules for everyone, about those rules when no one will have to look for any special tools: neither individual entrepreneurs to receive salaries, nor large businesses creating non-resident traders,” added Shurma.
As reported, earlier journalists found out that a number of companies owned by the family of the deputy head of the Office of the President, Rostislav Shurma, legally avoid paying taxes through schemes with offshore companies and venture funds.
In particular, venture funds are exempt from paying income taxes and have half the tax rate on dividends. They can also lend funds to their own companies and thereby reduce the income tax of their subsidiaries.
Journalists noted that such tax optimization schemes are legal, but their use looks doubtful against the backdrop of public statements by Rostislav Shurma.
In particular, Shurma previously proposed limiting cash payments, explaining this by the fight against low tax payments in the non-state sector and bribery.
“Objectively, people don’t pay taxes. Of those working in the non-state sector, 60-70% do not pay taxes in full. It is a fact. It is enough to look at consumer spending in the economy and the amount of wages paid to reach these figures,” explained Shurma. .
Note that the tax schemes of his brother’s business will not be hindered in any way by limiting cash transactions.
At the same time, the National Bank of Ukraine noted that the banking system is ready to completely abandon cash payments, but such a practice has never happened in any country in the world.
