Ukraine has successfully implemented the CRS Common Reporting Standard, which means that the Ukrainian tax service will have access to bank accounts of Ukrainian citizens abroad. Find out what will change and how it will affect financial transparency and tax compliance

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The State Tax Service of Ukraine (STS) has received the OECD Global Forum's Report on the Maturity of the Information Security Management System in Ukraine and the Exchange of Information for Tax Purposes. According to the STS press service, this opens up new opportunities to control financial flows of Ukrainians abroad.

Implementation of European standards and system maturity assessment

The process of assessing the maturity of the information security management system in Ukraine has been underway since 2019 and included several stages, the final of which ended in December 2023. Particular attention was paid to information exchange, privacy protection, risk management, logical and physical access control, and cybersecurity approaches.

The implementation of the CRS Common Reporting Standard and the Country-by-Country Reporting (CbCR) standard is coordinated by the OECD Secretariat. To ensure the automatic exchange of information, the STS has joined the Common Data Transfer System (CTS), which is used to securely exchange information in accordance with international standards.

As of June 2024, more than 115 jurisdictions are members of the international multilateral automatic exchange of information. Ukraine has committed to start automatic exchange in September 2024. Such an exchange will allow the Ukrainian tax service to receive data on bank accounts of Ukrainian residents abroad and other financial information related to international groups of companies.

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What does this mean for Ukrainians?

As explained by Danylo Hetmantsev, MP and Chairman of the Verkhovna Rada Committee on Finance, Taxation and Customs Policy, the State Tax Service will soon have access to information on the status of bank accounts of Ukrainian residents abroad. This includes data on tax payments, income, activities and number of employees of international groups of companies. This step will facilitate more effective control over tax compliance and ensure transparency of financial transactions of Ukrainians abroad.

We remind you! According to the Tax Code, Ukrainians who are located and have income abroad but have permanent residence in Ukraine are residents of Ukraine. This means that they must file a tax return. Read how to do this, who is obliged to pay taxes twice, and what fees will have to be paid in any case in this article.

Photo: Freepik

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Ihor Usyk is the Head of Legal Department at Visit Ukraine

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