On April 28, 2023, the law amending the Tax Code of Ukraine No. 2970-IX came into effect. According to this law, all financial institutions in Ukraine are required to collect and report information to the competent authorities of their jurisdictions regarding the accounts of individuals and organizations who are residents of jurisdictions participating in the Multilateral Competent Authority Agreement (referred to as “reportable persons”).
The information subject to exchange will include details on non-resident accounts, the account balances as of the end of the year or at the time of account closure, the total amounts of credited or debited funds, and other financial information depending on the type of account.
The list of jurisdictions with which Ukraine plans to exchange information about reportable financial accounts has already been published on the State Tax Service’s website and includes Cyprus, the UAE, the UK, Estonia, Austria, and others. The first exchanges of information are scheduled for the following dates:
– September 30, 2024 – concerning new accounts opened after July 1, 2023, and high-value individual accounts (individual accounts with a balance or value exceeding 1 million USD as of June 30, 2023).
– September 30, 2025 – concerning low-value individual accounts (less than 1 million USD as of June 30, 2023) and organization accounts with a balance or value exceeding 250,000 USD as of June 30, 2023.
The information obtained through the CRS system may be used by Ukrainian tax authorities primarily for the following purposes:
– Taxation of income for individuals earned in foreign accounts but not declared in Ukraine.
– Application of Controlled Foreign Company (CFC) rules, as tax authorities can identify CFC controllers through the beneficiaries of the accounts.
In light of the above, tax officials will be able to automatically receive information about the finances of Ukrainian residents abroad under CRS, without the need for additional requests.