In July, 2023 Ukraine launched its automatic exchange of financial and tax information. Starting in 2024, tax authorities of participating countries will exchange data for the 2023 tax year under the CRS Multilateral Competent Authority Agreement (CRS MCAA) for 2023.
The primary aim of the automatic exchange is to identify undeclared income of tax residents abroad and insure accurate income declarations and tax payments.
Legal Framework:
To aligh with the international transparency standards, the Ukrainian Parlament enacted the Law “On Amendments to the Tax Code of Ukraine and other Legislative Acts of Ukraine on the Implementation of an International Standard for the Automatic Exchange of Financial Account Information”, effective January 01, 2024.
Related International Agreements and Standards Implemented into Ukrainian Law:
Under the Order of the Ministry of Finance of Ukraine dated September 25, 2023 No. 516, the first report on accountable accounts for the reporting period from July 01, 2023 to December 31, 2023 inclusively, must be submitted by July 01, 2024.
Accountable Jurisdictions
On May 26, 2024, the State Tax Service of Ukraine published the List of Accountable Jurisdictions with which Ukraine will exchange information on accountable financial accounts under the CRS Multilateral Agreement. The list consists of 118 jurisdictions.
It is worthy to notice that Türkiye is also among them. This means that such data as name, address, date of birth, tax residense, identification number of the holders of accountable accounts starting from 2024 (for the second half of 2023 in 2024) will be shared between Turkish and Ukrainian tax authorities.
Conclusion: The automatic exchange of financial and tax information will help Ukraine identify undeclared income of tax residents and to prevent “base erosion and profit shifting”, enchansing the country’s tax compliance and revenue collection efforts.
NAZALI TAX & LEGAL