On 14 October 2022, the Cabinet of Ministers of Ukraine approved and registered in the Parliament the bill No. 8131 “On Amendments to the Tax Code of Ukraine regarding the implementation of the international standard for automatic exchange of financial account information (AEOI)” was approved.
The draft Law is aimed at implementing the Common Standard on Reporting and Due Diligence for Financial Account Information (CRS Standard) by Ukraine that provides for the annual international automatic exchange of financial account data. Introducing CRS Standard requirements into national legislation is a mandatory condition for Ukraine to join the international information exchange system within the framework of the Multilateral Competent Authority Agreement on Automatic Exchange of Financial Account Information that Ukraine, as represented by the State Tax Service of Ukraine (STS), acceded to in August 2022.
The main amendments to the Tax Code of Ukraine provided for by the draft law shall establish:
− the requirements for financial agents to apply CRS Standard rules during due diligence of financial accounts and to submit to the STS the information about the financial accounts of account holders being the tax residents of other jurisdictions – partner states for information exchange;
− the functions and rights of supervisory authorities to ensure the receipt of information necessary for the exchange in accordance with CRS Standard; − the requirements regarding the minimum period of storage of documents and the procedure for providing such documents to the supervisory authority by some economic entities;
− the procedure for obtaining information for tax purposes by the supervisory authority in accordance with CRS Standard and upon the request from the competent authority of a foreign jurisdiction on the basis of an international treaty;
− the effective control mechanism for compliance with standards by financial agents.
The adoption of the draft Law will ensure Ukraine’s proper fulfillment of international obligations regarding the exchange of information for tax purposes, increase the transparency and reliability of Ukraine as a partner state for information exchange, and also contribute to the prevention of tax evasion and increase the level of compliance with tax legislation.
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