Control purchase and actual inspection of the store: an entrepreneur's algorithm of actions

Control Purchase by the State Tax Service: How to Prepare a Store for an Inspection

A control purchase may take place without prior notice: an official of the State Tax Service purchases goods as an ordinary customer, checks the fiscal receipt, payment method, and actual price, and presents the documents authorizing the inspection only after the transaction has been completed. Therefore, protecting the store begins not when inspectors present their IDs, but with the cashier’s correct daily work: every sale must be processed through a registered ECR or PECR, the customer must receive a proper receipt, the goods must be properly recorded, and the employee must be officially employed.

After an actual inspection is announced, the entrepreneur should check the inspection referral, a copy of the inspection order, and the official IDs of all inspectors, record the time and circumstances of their admission, appoint a responsible person, and provide only documents related to the subject of the inspection. An unjustified refusal to admit inspectors creates a risk of administrative seizure of property, and for stores selling excisable goods — also termination of the license. At the same time, the entrepreneur has the right to record the inspection, require proper documentation, state objections in the inspection report, and appeal decisions of the tax authority.

What Is a Control Purchase

In everyday communication, entrepreneurs usually use the term «control purchase». The Tax Code refers to such an action as a control settlement transaction.

Its essence is that an official of the supervisory authority makes a payment for goods or services and checks, in particular:

• whether the sale was processed through a registered ECR or PECR;

• whether a fiscal receipt was generated;

• whether the amount on the receipt corresponds to the amount actually paid;

• whether the payment method is indicated correctly;

• whether the name, quantity, and price correspond to the goods actually sold;

• whether the receipt contains all mandatory details;

• whether special requirements for excisable goods have been complied with.

A control settlement transaction may be conducted before the inspection referral, copy of the order, and official IDs are presented. Therefore, a cashier cannot require documents from every customer making an ordinary purchase and should not try to identify an inspector by their behavior.

Goods obtained during a control settlement transaction must be returned to the store in undamaged condition. If the goods cannot be returned, the costs are reimbursed in accordance with consumer protection legislation. The refund must be processed through the ECR or PECR as a proper settlement transaction rather than simply returning cash from the register.

What the State Tax Service Checks During an Actual Store Inspection

An actual inspection is conducted at the place where business activities are actually carried out, where the store, cash register, goods, or other facilities of the taxpayer are located.

The subject of a specific inspection must be defined by the order and inspection referral. Inspectors should not, without justification, turn an inspection of a cash transaction into an unlimited examination of the entrepreneur’s entire business activity. At the same time, after the lawful commencement of the inspection, the taxpayer is obliged to provide documents related to the subject specified in the order.

Grounds for Conducting an Actual Inspection

An actual inspection is conducted without prior notice, but only if there is an order issued by the head of the supervisory authority and at least one of the grounds provided for by Article 80 of the Tax Code.

Such grounds include:

• results of other inspections indicating possible violations in the area of settlements, cash transactions, licensing, or circulation of excisable goods;

• information from state authorities or local self-government bodies about possible violations;

• a written customer complaint submitted in accordance with the law;

• failure to submit ECR or PECR reporting or submission of reports with zero indicators despite actual business activity;

• information about violations of the rules for production, accounting, storage, transportation, or sale of excisable goods;

• the need to verify whether a violation identified during a previous actual inspection has been corrected;

• information about the use of undeclared labor;

• information about an individual conducting business activities without state registration.

The order must specify the type of inspection, its grounds, purpose, address of the facility, start date, and duration. A general reference to the powers of the tax authority is insufficient without specifying a ground provided for by the Code.

Cashier’s Procedure During a Control Purchase

Before Inspectors Present Their Documents

The cashier should serve the customer in the normal manner:

1. Add the goods actually selected by the customer to the sale.

2. Check the name, quantity, and price.

3. Select the actual payment method.

4. Process the full amount through a registered ECR or PECR.

5. Wait for successful fiscalization.

6. Issue a paper receipt or send an electronic receipt in the manner provided by law.

7. Hand the goods to the customer only after the settlement has been completed.

A payment terminal slip, bank notification, sales receipt, invoice, delivery note, or entry in accounting software does not by itself replace a fiscal receipt if the transaction must be processed through an ECR or PECR.

The receipt must contain all mandatory details established by the Regulation on the Form and Content of Settlement Documents. The absence of a mandatory detail may result in the document not being recognized as a proper settlement document.

After Inspectors Present Their IDs

The cashier should:

• remain calm and not obstruct lawful actions;

• notify the owner, manager, or designated representative;

• not delete the sale from the software;

• not cancel the receipt without proper grounds;

• not retroactively change the price, product name, payment method, or other information;

• record the purchase time, receipt number, product name, amount, and payment method;

• save a copy of the receipt or find it in the ECR or PECR archive;

• process the return of the goods and refund through the ECR or PECR if the inspectors return the control-purchase goods;

• not provide passwords, qualified electronic signature media, or PECR access codes;

• not make verbal assumptions about the possible cause of an error.

The cashier may report only facts that are reliably known to them: what transaction was performed, through which cash register, what payment method was accepted, and what document was issued.

What Documents Inspectors Must Present

Before starting an actual inspection, State Tax Service officials must:

1. Present an inspection referral.

2. Provide a copy of the inspection order.

3. Present their official IDs.

4. Be listed in the inspection referral.

An actual inspection is conducted by at least two officials of the supervisory authority in the presence of company officials, the entrepreneur’s representative, or the person who actually performs settlement transactions.

What to Check in the Inspection Referral

The inspection referral must contain:

• date of issue;

• name of the supervisory authority;

• details of the inspection order;

• name of the legal entity or full name of the entrepreneur;

• address of the facility being inspected;

• purpose and type of inspection;

• legal grounds;

• start date;

• duration;

• positions and surnames of the inspectors;

• signature of the authorized official;

• seal of the supervisory authority.

What to Check in the Inspection Order

The copy of the order must contain:

• date of issue;

• name of the supervisory authority;

• taxpayer details;

• address of the store or other facility;

• type of inspection;

• purpose and grounds;

• start date;

• duration;

• signature of the authorized person;

• seal.

Each inspector’s official ID should be compared with the inspection referral. An official who is not listed in the referral does not acquire the right to conduct the inspection merely because they arrived together with other inspectors.

When signing the inspection referral, the person should indicate their surname, position, and the actual date and time of familiarization. Refusal to sign does not stop the inspection: inspectors may draw up a report on the refusal and then begin the inspection. Therefore, it is more appropriate to sign the referral with comments, if any, rather than refuse to sign without explanation.

When Inspectors May Be Denied Admission

Admission may be denied if:

• the inspection referral has not been presented;

• a copy of the inspection order has not been provided;

• official IDs have not been presented;

• the documents have been prepared in violation of mandatory requirements;

• an official who is not listed in the inspection referral attempts to participate in the inspection.

The reason for denying admission should be clearly stated with reference to the specific non-compliance with Article 81 of the Tax Code, recorded in writing, and, where possible, recorded on video.

The following are not independent legal grounds for denying admission:

• absence of the director or owner;

• waiting for a lawyer or accountant;

• the entrepreneur’s disagreement with the appropriateness of the inspection;

• the cashier’s unwillingness to communicate with inspectors;

• an oral instruction from management to «let no one in».

The Tax Code expressly prohibits refusing admission for reasons unrelated to failure to provide, or improper preparation of, the documents required by law.

An unjustified refusal to admit inspectors to a lawful inspection may constitute grounds for administrative seizure of the taxpayer’s property. For stores selling alcohol, tobacco products, liquids used in electronic cigarettes, or fuel, an unlawful refusal to admit inspectors also constitutes one of the statutory grounds for termination of the license.

How Long an Actual Inspection May Last

An actual inspection may last no more than ten days.

An extension is permitted for no more than five days and only in cases provided for by the Tax Code, including:

• at the entrepreneur’s request, if they need to submit documents related to the inspection;

• due to shift work or summarized working-time accounting used by the business entity or its facility.

The extension must be formalized by an appropriate decision of the supervisory authority.

How an Entrepreneur Should Act During an Inspection

Appoint One Representative

One responsible person should interact with the inspectors — the owner, director, authorized employee, lawyer, or another representative.

The cashier and other employees should be instructed that they:

• do not provide documents independently;

• do not provide explanations on behalf of the company;

• do not allow inspectors access to work computers without the responsible person being present;

• do not sign documents whose contents they do not understand;

• refer all requests to the designated representative.

Record the Inspection

The taxpayer has the right to openly use photo, audio, and video recording during the inspection. Supervisory authorities also have the right to use technical recording devices.

It is advisable to record:

• presentation of documents;

• the actual start time of the inspection;

• the composition of the inspection team;

• delivery of written requests;

• cash counting;

• inventory counting;

• collection of document copies;

• explanations provided by officials;

• preparation and delivery of the inspection report.

Recording must not interfere with the inspectors’ work or violate the rights of customers and employees.

Register All Requests

All written requests from inspectors should be copied or photographed and the following should be recorded:

• date and time received;

• full name of the official;

• list of requested documents;

• stated legal grounds;

• deadline for submission;

• list of copies actually provided.

A written request must specify the particular documents requested and the grounds for providing them.

What Documents Must Be Provided

After the inspection begins, the entrepreneur is obliged to provide documents that relate or are connected to the subject of the inspection.

These may include:

• documents on ECR or PECR registration;

• information about the business unit;

• fiscal receipts and reporting documents;

• documents confirming the recording of goods;

• supplier invoices;

• consignment notes;

• acceptance certificates;

• documents on internal movement of goods;

• inventory statements;

• licenses and documents confirming payment of license fees;

• employment contracts, employment orders, and employee hiring notifications;

• documents related to cash transactions;

• documents related to the payment terminal;

• documents for excisable goods.

The following should not be provided on your own initiative:

• the entire accounting database;

• bank statements for periods and transactions unrelated to the subject of the inspection;

• contracts unrelated to the store or transaction being inspected;

• customers’ personal data that is irrelevant to the inspection;

• passwords, private keys, and electronic signature tools;

• original documents without a legal basis for requesting them.

As a general rule, tax authorities are prohibited from seizing originals of primary, financial, business, and accounting documents. Exceptions are possible within criminal proceedings in accordance with criminal procedure legislation.

Documents should preferably be provided under an itemized list specifying the name, number, date, and number of pages of each document. Copies should be marked as corresponding to the original and include the date, signature, and details of the person who certified the copy.

Inventory of Goods and Stock Verification

The supervisory authority has the right to require an inventory of fixed assets, inventory items, and cash.

During a store inventory, it is necessary to:

1. Record the start date and time.

2. Designate the entrepreneur’s responsible representative.

3. Stop or organizationally separate the movement of the goods being counted.

4. Record the initial accounting balances.

5. Take into account goods in reserve, being returned, under repair, in safekeeping, or in internal transfer.

6. Record damaged, written-off, or display samples separately.

7. Compare the actual quantity with the accounting data.

8. Obtain a copy of the inventory list or report.

9. Record all discrepancies and comments regarding the counting methodology in writing.

An inventory statement should not be signed if it contains blank rows, does not specify units of measurement, does not account for the movement of goods, or contains quantities that the store representative did not verify.

Refusal to conduct an inventory may have separate adverse consequences. For licensed trade in excisable goods, an unlawful refusal to conduct an inventory of goods or determine actual cash balances constitutes grounds for termination of the license.

Documents for Goods and Inventory Accounting

The documents must make it possible to determine:

• from whom the goods were received;

• when the goods were received;

• their name, quantity, and price;

• the fact that the goods were recorded;

• movement between warehouses and stores;

• current stock balance;

• write-off, return, or sale.

For goods in the store, it is advisable to have:

• supplier delivery notes or goods invoices;

• acceptance certificates;

• payment documents;

• consignment notes, if they were issued;

• documents on internal transfers;

• return documents;

• write-off certificates;

• certificates, declarations of conformity, or other documents if they are mandatory for the respective products;

• documents concerning excise marking if the goods are excisable.

Entities covered by paragraph 12 of Article 3 of the ECR Law must keep inventory records and provide documents during an inspection confirming the origin and accounting of the goods.

For the sale of unrecorded goods or failure to provide documents confirming their accounting, a financial penalty is imposed in the amount of the value of such goods at retail prices, but not less than ten non-taxable minimum personal incomes, i.e. not less than UAH 170.

This penalty does not apply to Sole Proprietorships — single-tax payers that are not registered as VAT payers, except for entrepreneurs who sell:

• technically complex household goods subject to warranty repair;

• medicines;

• medical devices;

• jewelry and household products made of precious metals, precious stones, or semi-precious stones.

Verification of Employee Registration

An actual inspection may cover the employer’s compliance with labor legislation.

An employee may not be admitted to work without:

• concluding an employment contract;

• issuing an employment order or instruction;

• submitting an employee hiring notification to the authorized state authority.

Inspectors may check the employee’s identity documents, position, work schedule, employment order, and submitted notification.

A cashier working with a PECR must also have a properly registered electronic signature and be included in the data on persons authorized to conduct settlement transactions through the relevant PECR.

Disguising employment relations as an internship, trial day, undocumented assistance from a relative, or civil contract where actual employment characteristics are present creates a separate risk of liability.

ECR and PECR: What to Check Before Inspectors Arrive

Registration Details

It is necessary to check whether the following correspond to the actual data:

• seller’s name and tax number;

• address of the business unit;

• store name;

• fiscal number of the ECR or PECR;

• cashier details;

• list of cash registers used at the point of sale;

• ECR or PECR details entered in the licensing registers.

A PECR registered for another business unit, another address, or another business entity must not be used.

Product Nomenclature

The software must correctly specify:

• full product name;

• quantity;

• unit of measurement;

• price;

• VAT rate and amount if the seller is a VAT payer;

• tax group;

• UKT ZED commodity subcategory code for excisable goods;

• the numeric value of the excise tax stamp barcode when it must be indicated on the receipt.

A description such as «goods», «service», or «sale» instead of the actual product name does not ensure proper identification of the goods sold.

Payment Method

The receipt must indicate the actual payment method:

• cash;

• payment card;

• combined payment;

• another method provided for by the settings.

A card payment must not be recorded as cash or vice versa. The payment terminal slip must correspond to the amount and time shown on the fiscal receipt.

Electronic Receipt

An electronic receipt must be provided to the customer in the form prescribed by law. The link or QR code must open the actual fiscal document.

The absence of a paper printout is not a violation if the customer has been properly provided with an electronic settlement document. However, a verbal promise to send a receipt, a screenshot from the software, or a non-fiscal document does not replace a registered electronic receipt.

Internet, Power, or PECR Failure

The cashier must not process a sale in ordinary accounting software without fiscalization and then create receipts retroactively.

In the event of a technical failure, only a procedure provided for by law and configured in advance should be used:

• PECR offline mode;

• a registered backup ECR or PECR;

• a settlement receipt book and settlement transaction record book if they are registered and may be used in the particular situation;

• temporary suspension of settlement transactions if no lawful backup method is available.

After communication is restored, offline documents must be transmitted to the fiscal server in the prescribed manner. Deleting local receipts, manually changing their numbering, or reprocessing the same sales may create new discrepancies.

Online Sales and Delivery of Goods

For orders made through a website, social media, marketplace, or messenger, the need to use an ECR or PECR depends on the method of accepting payment.

If the payment constitutes a settlement transaction, the seller must:

• process it through an ECR or PECR;

• generate a fiscal receipt;

• provide the receipt to the customer in paper or electronic form;

• correctly indicate the payment method;

• not replace the receipt with an invoice, delivery note, carrier receipt, or bank notification.

Goods handed over to a courier or carrier must be accompanied by the documents required for the specific sales and delivery model. The accounting system must make it possible to trace the movement of goods from the store or warehouse to the customer and, in the event of a return, their receipt back into stock.

Stores Selling Alcohol, Tobacco, and Other Excisable Goods

For retail trade in excisable goods, it is necessary to separately monitor:

• license validity;

• timely payment of license fees;

• correct address of the place of trade;

• use of only declared ECRs or PECRs;

• availability and authenticity of excise marking;

• correct UKT ZED codes;

• mandatory excise details on receipts;

• origin and recording of goods;

• correspondence between actual stock and accounting records;

• compliance with established sales rules.

Law No. 3817-IX provides for termination of a license, in particular, in the event of:

• an inspection establishing that the business entity is absent at the address where business activities are conducted;

• unlawful refusal to admit inspectors;

• refusal to conduct an inventory of excisable goods or determine cash balances;

• discovery of unrecorded excisable goods in the cases and amounts specified by law;

• repeated sale of excisable goods within 365 days through an ECR or PECR not specified in the relevant register, or without using an ECR or PECR;

• absence in fiscal memory or on the fiscal server of three or more settlement documents for the sale of excisable goods in cases provided for by law.

A decision to terminate a license based on the inspection results is sent in accordance with the procedure established by law. If an administrative or judicial appeal is successful, the license is restored from the date of its termination.

Liability for Violations

The financial penalty for failure to issue a receipt is calculated based on the amount of the specific sale made in violation. For example, if the first recorded settlement transaction in the amount of UAH 1,000 was not processed through an ECR or PECR, the financial penalty will amount to UAH 1,000. For the next transaction in the same amount — UAH 1,500.

Administrative fines under Article 155-1 of the Code of Ukraine on Administrative Offenses are applied separately to employees and officials in accordance with the procedure established by law. For calculating these fines, one non-taxable minimum personal income equals UAH 17.

Liability for failure to provide documents related to the subject of the inspection is established by paragraph 121.1 of the Tax Code. At the same time, inspectors must properly specify which documents are requested and how they relate to the inspection.

How to Sign an Actual Inspection Report

Signing the inspection report does not automatically mean agreement with the conclusions stated in it.

Before signing, you should:

• read the entire document;

• check the date, time, and place;

• compare the inspection order and referral numbers;

• check the composition of the inspection team;

• check the description of the control transaction;

• compare the receipt number and contents with the actual data;

• check the list of documents received;

• make sure that the entrepreneur’s explanations are included in the report;

• cross out blank lines;

• obtain your own copy.

If the entrepreneur disagrees with the report, the following may be written next to the signature:

«The report has been received. I disagree with the conclusions. Objections and supporting documents will be submitted in accordance with the procedure established by law.»

You should not write «I acknowledge the violation», «I have no comments», or sign explanations prepared by an inspector if their contents do not correspond to the facts.

Objections and Appeals

Objections to the inspection report must be submitted to the supervisory authority within 10 business days following the day on which the report was received.

The objections should be accompanied by:

• copies of the inspection referral and order;

• video recordings and photographs;

• a copy of the fiscal receipt;

• an extract from the accounting system;

• invoices and documents confirming the recording of goods;

• documents concerning the return of the control-purchase goods;

• written explanations from the cashier;

• documents concerning a technical failure;

• evidence that the electronic receipt was sent;

• comments regarding the inventory;

• employee registration documents;

• other materials disproving the inspectors’ conclusions.

The tax authority considers the objections with the participation of the taxpayer or their representative if the taxpayer has notified the authority of their intention to participate.

The inspection report itself does not determine the final amount of a monetary tax liability. Financial penalties are imposed by a tax assessment notice or another decision provided for by law.

An appeal against a tax assessment notice must be submitted to a higher-level supervisory authority within 10 business days following the day on which the decision was received. The decision may also be challenged in court.

Case Law on Violations When Ordering an Inspection

In its ruling dated February 21, 2020, in case No. 826/17123/18, the Supreme Court established an approach under which allowing inspectors to conduct an inspection does not deprive the taxpayer of the right subsequently to refer to violations of the procedure for ordering and conducting the inspection when appealing decisions adopted based on its results.

The court must first assess the procedural violations invoked by the taxpayer if they could have affected the lawfulness of the inspection and the decisions adopted as a result.

This does not mean that every technical inaccuracy automatically invalidates the inspection results. A specific violation and its effect on the lawfulness of the supervisory authority’s actions must be proven.

Checklist for Preparing a Store for an Actual Inspection

ECR and PECR

• The ECR or PECR is registered for the correct business unit.

• The store address corresponds to the registration data.

• Cashiers are registered and have valid keys.

• Goods that must be fiscalized are configured correctly.

• Product names, prices, tax groups, and UKT ZED codes are up to date.

• The payment method on the receipt corresponds to the actual payment.

• The electronic receipt is actually delivered to the customer.

• Refunds are processed through the ECR or PECR.

• A lawful procedure for operating during technical failures has been configured.

Inventory Accounting

• All goods have been properly recorded.

• Invoices can be found quickly.

• Internal transfers have been documented.

• Returns and write-offs are recorded.

• Actual stock is regularly reconciled with the software.

• Documents for goods are stored in an accessible paper or electronic form.

Cash Register

• Cash corresponds to ECR or PECR data.

• Cash deposits and withdrawals are properly recorded.

• Card payments are not recorded as cash.

• Employees know the refund procedure.

• There are no unrelated funds in the cash drawer without documentary explanation.

Licenses and Excisable Goods

• The license is valid.

• Payments have been made on time.

• The address and cash registers correspond to the licensing data.

• Excisable goods have proper markings.

• Receipts contain the required codes and details.

• Actual stock corresponds to accounting records.

Employees

• Employment contracts and orders are available.

• Hiring notifications were submitted before the employees started work.

• Employees can confirm their position and employer.

• Cashiers know the procedure to follow during an inspection.

• A person responsible for contacting the lawyer or accountant has been designated.

Internal Procedures

• There is a short written instruction for cashiers.

• A representative has been designated to communicate with inspectors.

• Employees know where documents are stored.

• Video surveillance has been configured in compliance with legal requirements.

• Internal control sales are conducted regularly.

• Errors are corrected immediately using lawful procedures rather than retroactively.

Official Sources

1. Tax Code of Ukraine dated 02.12.2010 No. 2755-VI — Articles 17, 20, 75, 80, 81, 82, 85, 86, 94, 121:
   https://zakon.rada.gov.ua/laws/show/2755-17

2. Law of Ukraine «On the Use of Registrars of Settlement Transactions in Trade, Catering and Services» dated 06.07.1995 No. 265/95-VR — Articles 3, 15, 17, 20:
   https://zakon.rada.gov.ua/laws/show/265/95-%D0%B2%D1%80

3. Regulation on the Form and Content of Settlement Documents/Electronic Settlement Documents, approved by Order of the Ministry of Finance of Ukraine dated 21.01.2016 No. 13:
   https://zakon.rada.gov.ua/laws/show/z0220-16

4. Procedure for Maintaining Inventory Records for Sole Proprietorships, approved by Order of the Ministry of Finance of Ukraine dated 03.09.2021 No. 496:
   https://zakon.rada.gov.ua/laws/show/z1411-21

5. Code of Ukraine on Administrative Offenses — Article 155-1:
   https://zakon.rada.gov.ua/laws/show/80731-10

6. Law of Ukraine «On State Regulation of the Production and Circulation of Ethyl Alcohol, Alcohol Distillates, Bioethanol, Alcoholic Beverages, Tobacco Products, Tobacco Raw Materials, Liquids Used in Electronic Cigarettes, and Fuel» dated 18.06.2024 No. 3817-IX — Articles 16, 42, 46, 52:
   https://zakon.rada.gov.ua/laws/show/3817-20

7. Labor Code of Ukraine — Article 24:
   https://zakon.rada.gov.ua/laws/show/322-08

8. Resolution of the Cabinet of Ministers of Ukraine dated 17.06.2015 No. 413 «On the Procedure for Notifying the State Tax Service and Its Territorial Bodies of the Hiring of an Employee/Conclusion of a Gig Contract»:
   https://zakon.rada.gov.ua/laws/show/413-2015-%D0%BF

9. Resolution of the Cabinet of Ministers of Ukraine dated 29.07.2022 No. 894 «On Establishing Deadlines by Which Merchants Must Ensure the Possibility of Cashless Payments»:
   https://zakon.rada.gov.ua/laws/show/894-2022-%D0%BF

10. Regulation on Cash Transactions in the National Currency of Ukraine, approved by Resolution of the Board of the National Bank of Ukraine dated 29.12.2017 No. 148:
    https://zakon.rada.gov.ua/laws/show/v0148500-17

11. Procedure for Conducting Trade Activities and Rules of Trade Services in the Consumer Goods Market, approved by Resolution of the Cabinet of Ministers of Ukraine dated 15.06.2006 No. 833:
    https://zakon.rada.gov.ua/laws/show/833-2006-%D0%BF

12. Supreme Court ruling dated 21.02.2020 in case No. 826/17123/18:
    https://supreme.court.gov.ua/supreme/pro_sud/rishennya_sud_palat/palata_9901_25669_19