Starting from September 30, 2024, Ukraine's tax authorities began receiving data on foreign financial accounts of Ukrainian residents. According to media reports, about half a million accounts with a minimum balance of €200,000 have been identified. Owners of such accounts may now receive demands to declare their income and pay taxes in Ukraine.
This has become possible thanks to a law signed by Volodymyr Zelenskyy in April 2023. The law implements the international CRS (Common Standard on Reporting and Due Diligence for Financial Account Information) — a mechanism for the automatic exchange of financial information between partner countries.
What does this mean in practice?
CRS requires financial institutions to provide data on their clients' accounts, including balances, income, and activities, and to send this information to participating countries. Currently, there are 115 such countries, including all EU members, and Ukraine has become a full partner in this system.
What are the implications for foreign account holders?
Ukraine's tax authorities will gain access to information about your foreign assets, income, and even the number of employees in companies where you are a participant. Consequently, notifications demanding tax payments may become a matter of the near future.
Double taxation: fact or myth?
The introduction of CRS effectively initiates a mechanism for double taxation. Despite paying taxes abroad, Ukraine will demand its share. Account holders should be prepared for questions from tax authorities.
Advice: do not delay resolving tax issues. Consult specialists to prepare for potential demands and minimize risks.
Oleksandra Melnykova, Immigration and Refugee Consultant in Canada.
Copyright 2024 “SKI Immigration Inc.” All rights reserved.
