Network of sole proprietors: tax optimization or a "scheme"?

Recently, a persistent public narrative has been forming in Ukraine: if large businesses operate through a network of individual entrepreneurs, it is automatically a "tax evasion scheme." This message is actively promoted in political statements, press releases from law enforcement agencies, and information campaigns.

However, the main question is often lost behind the loud statements: Where is the line between legitimate tax optimization and actual tax evasion? And what exactly is the state doing today – applying legal mechanisms or using coercive pressure as a tool for economic regulation?

A sole proprietorship is not a "loophole," but a model created by the state.

The simplified taxation system for sole proprietors is a deliberate state policy that has been building the economy of small and medium-sized businesses in Ukraine for over two decades.

Subscribe to LIGA PRO to read this article. Go to the full version of the page.