Ukraine loses up to EUR 750 mln in taxes every year because of tax evasion – German media

Ukraine annually loses up to EUR 750 million in taxes because of tax evasion schemes.

This figure is mentioned in findings of the European United Left–Nordic Green Left, a left-wing political group in the European Parliament, Spiegel Online said.

"The findings of the research show that over the past three years (from 2015 to 2017), exports of iron ore from Ukraine were at least 20% undervalued," the study said.

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It is noted that not only iron ore, but also steel and agricultural products are involved in the schemes.

Experts came to the conclusion that concealing income abroad costs Ukraine about EUR 3 billion. Thus, Ukraine's budget falls short of EUR 750 million in taxes every year.

According to the research, the most common method of tax evasion is the establishment of a so-called transfer price.

"Companies from countries with higher taxes, like Ukraine, sell their products to branches of the same company at a price lower than the market one in countries with lower taxes.  Thus, the company shows a lower amount of profit for taxation in Ukraine," it said.

The authors of the study consider the results of the study to be particularly significant due to the fact that the EU has provided financial assistance to Ukraine in the amount of EUR 11 billion since 2014.

This is a big monetary support to the country whose annual economic turnover is EUR 92 billion, the researchers said.

The findings of this study will be made public on Monday, September 24.