Co-founder of the Foxtrot network Gennady Vykhodtsev believes that he should not pay tax after liquidating his foreign offshore company worth almost UAH 5 billion. But law enforcement officers have a different opinion.
The authorities are looking for money for the war. According to the Ministry of Finance, the budget need is about 12-15 billion dollars (more than 500 billion UAH). Ukraine expects to receive some of them from foreign partners. But it is unlikely that foreign money will cover all expenses, given how events are unfolding at the front. In addition, it is not yet clear what will happen to American assistance after the elections there.
It seems that this is why in Ukraine, on the one hand, they are preparing to increase the tax burden, and on the other, work has intensified to “tighten the screws” in relation to large defaulters and “tax evaders.” We are talking about legal entities and individuals who really like not to pay taxes, taking advantage of any gap in Ukrainian legislation. So the Ukrainian fiscals, and if they don’t succeed, then law enforcement officers try to put the squeeze on such defaulters.
The media learned that the Bureau of Economic Security received court permission to access financial documentation and information about the movement of funds in the accounts of the co-owner of the Foxtrot retail chain, Gennady Vykhodtsev. Access to Bureau detectives was provided as part of a pre-trial investigation on grounds of a criminal offense. provided for in Part 3 of Art. 212 of the Criminal Code of Ukraine, that is, tax evasion on an especially large scale.
The above follows from the corresponding decision of the Svyatoshinsky District Court of Kiev dated 08/05/2024 in case No. 759/15918/24.
The pre-trial investigation concerns not only Vykhodtsev, but also other defendants. The non-payment of taxes on personal income from a considerable amount - 6.193 billion hryvnia, received by a number of individuals as a result of the liquidation (termination) of foreign companies is being investigated. At the current personal income tax rate of 18%, this is more than UAH 1.1 billion. They want to recover the largest amount – UAH 655.469 million (including the amount of accrued tax and a fine) from the co-owner of the Foxtrot electronics supermarket chain, Gennady Vykhodtsev.
The essence of the matter is as follows: in 2021, Gennady Vykhodtsev, by a single decision, liquidated his foreign offshore IrineVenturesLimited, where he was the owner of 100%, and transferred all the company’s assets (consisting of loan claims, a total of $126.1 million) to himself as an individual face. In 2022, when he filed his tax return for the previous year, he reported these assets but did not include them as taxable income. The businessman believed that he was entitled to benefits because the funds were received as a result of the liquidation of a foreign company.
The Main Directorate of the State Tax Service in the Kyiv region had a different opinion on this matter, and it calculated him UAH 595.881 million in tax liabilities and another UAH 59.588 million in fines.
Vykhodtsev appealed the tax notice-decision in court, won the administrative case (No. 320/4281/23) in the first instance, and then won all stages of the tax appeal against this decision. On July 16, 2024, the Supreme Court finally rejected the cassation appeal of the tax authorities.
And now it seems that after the administrative case, Vykhodtsev’s problems did not end, and after the round with the tax authorities, a more serious confrontation awaits him - with detectives from the Bureau of Economic Security.
The fact that both cases (“criminal” - 759/15918/24, on investigators’ access to information, and the already completed “administrative” - No. 320/4281/23) concern Gennady Vykhodetsv is quite simple to establish by analyzing the plot of the above-mentioned court decisions . In the “criminal” decision, his name is hidden under the faceless OSOBA_18, in the “administrative” decision - OSOBA_1. In particular, the texts of court decisions contain absolutely identical amounts of tax debt, the same number of the trust declaration, the same number of the tax notice-decision, etc. And the name of the defendant is clearly visible from the public list of cases intended for consideration.
Hypothetically, the special attention of BEB detectives to Vykhodtsev could have been attracted by the fact that the offshore company Irine Ventures Limited, which he liquidated, the income from the termination of whose activities he decided not to tax, was previously mentioned as a participant in the high-profile Delta Bank case. In criminal investigation No. 12014100000000703, together with another company associated with Vykhodtsev (FG Financing Limited), the company appeared in the chain of withdrawing funds from the bank and laundering proceeds from crime. In 2018, the accounts of these companies were even seized, although the Pechersky Court subsequently overturned this decision.
Another interesting point is highlighted in the decision to provide detectives with access to Vykhodtsev’s accounts. This is the name of the director of his liquidated offshore company - Ivor Omson.
As the media wrote , a person with the same name and Seychelles citizenship (namely, it was there that Vykhodtsev’s offshore was first registered) previously appeared as a co-owner and director of a number of companies from the group of the sanctioned Dmitry Firtash. In addition, Ivor Omson was also recorded for some time by the owner of the banned 112th TV channel.
Also, according to the YouControl analytical system, Ivor Omson is now listed as the beneficiary of the Cyprus company Foxtrot Holding Overseas Limited, the owner of the Ukrainian Consult Inform Group LLC, which until 2016 was called Foxtrot Group of Companies LLC. Gennady Vykhodtsev was previously the founder and signatory of this company.
The above-mentioned circumstances are just what lies on the surface. At the same time, BEB detectives seem to have other reasons to put pressure on Gennady Vykhodtsev, using the tools of criminal charges. And it is not at all a fact that a businessman who once won the tax office in court will be able to easily defend his 655 million UAH in criminal charges. After all, let us remind you that the state really needs money for the war. And those tax avoidance schemes that people turned a blind eye to before may no longer work.
By the way, not only the owner of Foxtrot, Gennady Vykhodtsev, can be blamed for his unwillingness to pay his tax debt to the state - his company also regularly gets into serious tax scandals.
Thus, in 2019, fiscal officials calculated 645 million hryvnia in additional taxes for the retail chain. As the tax office explained, Foxtrot underestimated the tax base by including in the cost of goods additional services that are not subject to VAT, such as insurance. The scheme worked throughout the retailer’s extensive network.
And even during a major war, Foxtrot does not hesitate to use tax evasion schemes in its activities. One of these schemes is to include audiobooks or e-books in checks for retail sales of equipment, as if in the form of a gift. This allows Vykhodtsev’s company to significantly reduce the tax base (after all, these goods are not taxed). In total, using this scheme, large retail chains, including Foxtrot, “saved” (read: stole from the state) more than UAH 1.3 billion in taxes last year alone.
However, such schemes flourish not only in Foxtrot. Telegraph will continue to investigate tax evasion schemes. We are talking about tax fraud, and the import of some goods under the guise of others (cheaper), and so on. There is still a lot of interesting things ahead. And the state, with our help, can kill two birds with one stone - minimize corruption (at least locally) and find money for the military budget of a warring country. Don't switch
Reference:
Gennady Vykhodtsev is a co-founder of the Foxtrot brand together with Valery Makovetsky. Before the war, he ranked 82nd on the list of the richest people in Ukraine.
According to the YouControl analytical system, in 2022 (that is, exactly when the tax authorities demanded a tax debt from Vykhodtsev as an individual), Foxtrot LLC (USREOU 25554745) was liquidated due to bankruptcy, where Vykhodtsev had 25% until 2021 .
According to the YouControl analytical system, Gennady Vykhodtsev has a 25% stake in Foxtrot-Plus LLC (USREOU 30081094), and is a beneficiary of about 40 other companies.
According to the website of the Foxtrot group of companies, Gennady Vykhodtsev is also the general director and chairman of the board of founders of the Foxtrot group of companies. In 2022, Vykhodtsev was awarded a medal from the Commander-in-Chief of the Armed Forces of Ukraine Valery Zaluzhny “For assistance to the Armed Forces of Ukraine.”
