Ukraine has taken an important step towards increasing the transparency of the tax system by implementing the first international automatic exchange of information on financial accounts according to the Common Reporting Standard (CRS). This was reported by the Ministry of Finance of Ukraine.
As part of this exchange, the State Tax Service of Ukraine transferred data on the financial accounts of non-residents to the tax authorities of partner jurisdictions, and also received information on the accounts of tax residents of Ukraine. The exchange included information about financial accounts maintained by financial institutions (such as banks, insurance and investment companies) and owned by residents of partner jurisdictions. The information includes the owner's name, address, tax residency, tax number, date and place of birth, as well as account details, the balance at the end of the reporting period and the amount of income received.
The Ministry of Finance emphasized that Ukraine's participation in the international system of automatic information exchange creates a more transparent tax environment and enhances the image of Ukraine as a reliable partner in international tax relations.
Thanks to access to information about foreign financial assets of its residents, Ukraine will be able to:
- strengthen control over the completeness of the declaration of taxable income;
- detect undeclared income and fight tax evasion;
- to improve the effectiveness of the rules of taxation of controlled foreign companies;
- to obtain additional sources of tax information for the implementation of indirect methods of control over the taxation of individuals.
This step is part of Ukraine's obligations in the process of EU integration and is aimed at increasing the transparency of the tax sphere. The Ministry emphasized that thanks to the exchange of data, Ukraine will be able to fight tax evasion more effectively, which will contribute to additional tax revenues, and therefore, to the economic stability and development of the country.
The CRS provides for the annual automatic exchange of information on certain types of financial accounts between states that have joined the Multilateral Competent Authority Agreement. Tax authorities annually receive an array of data on foreign accounts belonging to their tax residents. The first reporting period covered the period from July 1 to December 31, 2023, and the first data exchange was successfully completed on September 30, 2024. Today, about 110 jurisdictions are participants in this international exchange, including all EU member states.
