Since 2022, Ukraine has been integrating into the international system of automatic exchange of financial account information in accordance with the Common Reporting Standard (CRS). The first exchange of information on financial accounts under CRS will take place in 2024 for the second half of 2023. Subsequently, financial account holders will report for the previous calendar year.

 

What risks does CRS exchange carry, and how can it affect your business?

 

The Common Reporting Standard (CRS) is an international system for automatically exchanging financial account information. It was developed by the Organisation for Economic Co-operation and Development (OECD) to combat tax evasion and ensure the transparency of financial operations globally. Over 100 countries have already joined CRS, and Ukraine will join in 2024. You can read more about CRS in our material.

 

Joining CRS will enhance the transparency of financial operations and minimize potential legal and financial risks. Essentially, the Ukrainian tax authorities, through automatic exchange, will receive all information about your accounts, account balances, income, and information about the controlling person, thereby ensuring transparency of financial operations.

 

Who is affected by CRS exchange?

 

CRS covers both individual and corporate accounts. Business owners and investors need to understand that they will not be able to hide their income and account movements from CRS, so they need to prepare in advance for the automatic exchange:

  • Corporate clients with accounts in international payment systems and surplus funds on these accounts. Financial institutions must report on non-resident accounts, necessitating additional compliance measures.
  • Companies operating in international markets. Your financial activity will become more transparent, which may require a review of existing financial practices.
  • Investors and business owners cooperate with EU markets and invest in real estate and other assets.

 

If undeclared income is discovered, first, you will be required to declare it (and of course pay taxes), and second, the detection of undeclared assets will result in fines ranging from 25% to 50% of the total undeclared income.

 

We recommend not taking risks and preparing in advance for future checks!

 

How to prepare for CRS?

 

To prepare for the automatic exchange of information, a detailed analysis of your assets should be conducted to identify risk areas. We offer comprehensive consulting services, including:

  • Detailed information about CRS, its principles and requirements, and what information will be transmitted by the tax authorities of your country of residence.
  • Determining your current tax resident status.
  • Analyzing the impact of CRS on your business: how the new rules will affect your activities.
  • Recommendations on compliance and what changes should be implemented to ensure compliance with the new requirements.
  • Analyzing the consequences that violations of CRS may entail.
  • Providing recommendations to minimize the risks of violations.

 

If you plan to open an account or company abroad – visit our Poland website, receive dividends or royalties, or purchase or sell real estate, we advise you to start with a consultation on automatic CRS exchange. Our specialists will be happy to advise you and provide high-quality service in further support of such issues as changing residency, preparing reports on controlled companies and filing declarations, identifying untaxed income and its optimal taxation, and changing the business structure.

 

Our specialists will gladly help you with CRS, please leave a request through the form below Viber, Telegram, WhatsApp We work from Monday to Friday from 9:00 to 19:00.

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