Expert Examination
April 19, 2022

[Tales of Dmitriy Zharskiy] Vegetable tax avoidance scheme – part 2

In the first part of the story about tax evasion using vegetables, I told about how the ‘Agro’ company avoids taxes with the help of the ‘OptTorg’ company. But it required to be proved..

What question was raised to the expert?
To determine the amount of VAT that ‘Agro’ LLC could deduct for settlements with ‘OptTorg’ LLC in the 1st, 2nd and 3rd quarters of 2015. To confirm or confute the validity of the VAT deduction based on the documents submitted for the study.

What did our expert discovered after analyzing the documentation?
The expert analyzed the documentation and noticed the following:

  • Despite the fact that the company's revenue amounted to several tens of millions, the amount of calculated VAT payable to the budget ranged from 5 to 20 thousand rubles.
  • Some of ‘OptTorg’ LLC's contractors are related to ‘Agro’ LLC through the founder and former co-owner.
  • Based on the results of the analysis of the current account statement for the period from 06/02/2014 to 11/27/2015, there was found that a significant part of fresh vegetables is purchased from contractors that are not VAT payers. And contractors who pay VAT are not reflected in the purchase book.


General findings made by the Veta expert
The information that was included in the VAT tax returns submitted for the study does not correspond to the documentary data. As a result, the application for the VAT tax deduction is groundless.

According to the documents, ‘OptTorg’ is presented as an intermediate link between suppliers and ‘Agro’ LLC, and between buyers of finished production and ‘Agro’ LLC (at the same time, in accordance with the current account statement, the possibility of selling ready-made canned food was only addressed to ‘Agro’ Trade House LLC). At the same time, in fact, ‘OptTorg’ did not carry out any real economic activity.

Taken together, that means that the participation of ‘OptTorg’ in this chain was not economically feasible – and it was needed only to increase the VAT deduction.

‘OptTorg’ LLC bought goods without VAT for ‘Agro’ LLC, and that made it possible for ‘Agro’ LLC to purchase goods from ‘OptTorg’ LLC with VAT at rates of 10% and 18%, and also to accept them for deduction when calculating the tax base for value added tax.

Thus, the scheme was revealed and proved.

All cases
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