Ukraine Launches Mass Audits of Businesses on Instagram and TikTok

Widespread Business Inspections in Ukraine

According to ХВИЛЯ: On June 16, the Verkhovna Rada Committee on Finance, Tax, and Customs Policy approved a decision that introduces large-scale audits of entrepreneurs. Online stores operating on Instagram, TikTok, and Telegram, along with retail, restaurants, the auto industry, and cargo companies, will fall under the scrutiny of the tax service, the Bureau of Economic Security, and customs. The State Tax Service (STS) has been tasked with analyzing entire industries and supply chains, covering processes from importers or manufacturers to end consumers.

New Requirements for Businesses

Under the approved decision, tax authorities are required to check compliance with value-added tax (VAT) payments, corporate income tax, wage taxes, the use of cash register equipment (RRO), social media activity, and signs of artificial business fragmentation. Each business will be categorized into one of three risk levels: low, medium, or high. Typical indicators of fragmentation include:

• Shared IP addresses,
• Same registration address,
• Identical sales locations,
• Same trademark, and
• Shared employees.

A clothing brand owner has already been fined 145 million hryvnias for using a structure involving multiple individual entrepreneurs (sole proprietors). The committee’s decision also mandates the STS to track anomalies in retail trade and examine posts on social media platforms such as Instagram, TikTok, Viber, WhatsApp, and Telegram. Tax officials are permitted to involve the police to ensure the scale of these audits.

Bohdan Yankiv, a committee representative, stated: 'The tax service will look at your actual business model, not just your sole proprietorship registration.'

He also emphasized that 'This is not a one- or two-month raid; it is a systematic audit process,' adding that 'Sole proprietorships are not banned, and limited liability companies are not banned, but artificial business fragmentation is becoming a key focus of tax control.'

Additionally, the committee plans to transfer analytical materials to the Bureau of Economic Security, signaling an intent to systematically monitor companies’ financial activities and identify potential violations related to tax evasion. Article 212 of the Criminal Code imposes criminal liability for intentional tax evasion, adding further pressure on entrepreneurs who may come under suspicion.

The Verkhovna Rada Committee’s decision has significant implications for Ukraine’s business environment, as it introduces new oversight mechanisms for entrepreneurial activities. These mass audits could lead to increased financial penalties and criminal consequences for business owners suspected of tax evasion. This may also shift how businesses operate, especially in sectors that heavily rely on social media to sell goods and services.

As these comprehensive audits are set to reshape the landscape for online businesses, entrepreneurs must also prepare for upcoming changes in the tax framework. Starting June 2026, new regulations will further impact how Ukrainian businesses operate and comply with tax obligations. To understand the implications of these future adjustments, it's essential for business owners to stay informed about the evolving tax landscape.