Ukrainians’ foreign capital will become more transparent — Paulius Majauskas
“Transparency and justice” is a key idea of changes in the field of taxation in Ukraine in the last year.
This is stated in the blog post written by Paulius Majauskas, EU4PFM International Key Expert on Tax Reform, published today on the Liga.net agency’s website.
As a reminder, a significant event happened at the end of August 2021: Ukraine officially announced its intention to exchange information on financial accounts for the first time ever according to the CRS standard in September 2023.
The automatic tax information exchange procedure is a tool developed by the Organization for Economic Co-operation and Development (OECD) to combat tax evasion.
Ukraine will receive information on its citizens’ bank accounts in more than 100 countries, including offshore and tax havens, as the rules of banking secrecy does not apply within the framework of the CRS standard.
The Common Reporting Standard or CRS is an international standard for the exchange of information on bank accounts, investment accounts and other instruments owned by individuals and, in some cases, non-resident legal entities.
As part of the exchange procedure tax administrations of foreign countries will send data on the accounts of Ukrainian citizens abroad, their balances and their annual turnover at the end of the year to Ukrainian tax authority.
International practice shows that the introduction of automatic information exchange procedures leads to an increase in tax revenues.
According to the latest data, 102 jurisdictions automatically exchanged information on more than 75 million financial accounts worldwide in 2020, containing data on assets with total value of about EUR 9 trillion.
The implementation of CRS has brought about EUR 112 billion of additional revenue to the national budgets (in the form of taxes, fines and penalties), which became possible due to (one-time) voluntary declaration programs, tax amnesties and similar initiatives, as well as offshore investigations. In addition, at least EUR 3 billion of this additional tax revenue was directly related to the use of information obtained through the exchange procedure. This data is taken from the 2021 Global forum annual report.
Moving forward to changes together!
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