Ukraine is confidently moving towards a fair and transparent taxation system

The Verkhovna Rada of Ukraine has adopted Draft Law 8131 on the implementation of the international standard for the automatic exchange of information on financial accounts (CRS) in the second reading and in a whole.

The Standard provides the tax administrations of countries with an effective tool to combat tax evasion and shifting profits offshore by providing information on financial assets held abroad by their residents. The adoption of the Draft Law allows Ukraine to properly fulfill its international obligations regarding the exchange of information for tax purposes, as well as contribute to the prevention of tax evasion, shifting profits, and increasing the level of tax compliance.

Starting July 1, 2023, Ukrainian reportable financial institutions are to apply due diligence procedures to the financial accounts, and the first exchange of information under the CRS will take place in 2024.The adoption of the Draft Law is an important step in the process of European integration of our country, as one of the parts of the EU Directive on Administrative Cooperation in the Field of Taxation regarding the exchange of information on financial accounts (DAC 2) has been implemented.

“The most important and complex part of the EU Directive on Administrative Cooperation has been successfully transposed to Ukrainian Tax Code. This is an example of proactive and effective cooperation between the Committee of the Verkhovna Rada of Ukraine on Finance, Tax, and Customs Policy, the Ministry of Finance of Ukraine, the State Tax Service of Ukraine, the Global Forum on Transparency and Exchange of Information for Tax Purposes and EU4PFM,” said Paulius Majauskas, international expert EU4PFM on tax.

The introduction of the CRS is one of the main priorities of the EU4PFM Project in the tax area, for the implementation of which the Project provides comprehensive support.

In particular, the EU4PFM project provided expert methodological assistance in the development of the adopted Draft Law and the secondary legislation necessary for the implementation of the Law.