The Verkhovna Rada of Ukraine adopted bill No. 8131 ‘On amendments to the Tax Code of Ukraine regarding the implementation of the international standard for automatic exchange of information on financial accounts’ (hereinafter – the bill).
The bill was developed with the aim of implementing in Ukraine the General Reporting Standard and Due Diligence of Information on Financial Accounts, approved by the OECD (hereinafter – CRS). Implementation of the CRS into national legislation is a mandatory condition for Ukraine to join the international information exchange system within the framework of the Multilateral Competent Authorities Agreement on the Automatic Exchange of Information on Financial Accounts (hereinafter – CRS MCAA), which Ukraine, represented by the State Tax Service, joined in August 2022 year
In particular, the main provisions of the bill establish:
- functions and rights of supervisory authorities to ensure the receipt of information necessary for exchange, in accordance with the CRS;
- requirements for financial agents to apply the rules of the CRS during due diligence of financial accounts and to submit to the State Tax Service information about the financial accounts of account holders who are tax residents of other jurisdictions – information exchange partners;
- requirements regarding the minimum period of storage of documents and the procedure for providing such documents to the supervisory body by some business entities;
- procedure for obtaining information for tax purposes by the supervisory authority in accordance with the CRS and at the request of the competent authority of a foreign jurisdiction on the basis of an international agreement;
- effective control mechanism for compliance with the requirements of the CRS by financial agents.
From July 1, 2023, the bill requires accountable financial institutions of Ukraine to apply due diligence measures to financial accounts to determine whether the accounts are subject to automatic exchange (whether the accounts are accountable). The CRS contains separate due diligence rules for accounts opened before and starting from July 1, 2023. Therefore, according to the time of opening, financial accounts are divided into ‘new accounts’ and ‘existing accounts’. Depending on this, separate rules for proper verification of accounts and deadlines for completing this verification are established.
The National Bank of Ukraine, by Resolution No. 26 of March 16, 2023, ‘On Disclosure of Information Regarding Clients’ Relationships with a State Carrying Out Armed Aggression Against Ukraine’, obliged banks during their activities to reveal and document information about clients' relationships and their counterparties with the state carrying out armed aggression against Ukraine. The categories of clients for which the bank is obliged to reveal and document such information and the amount of relevant information for each category are defined.
The National Bank has the right to apply to the bank with a separate request to obtain information about the connections of clients and their counterparties with the aggressor state discovered by the bank.
The collection and documentation of the specified information will contribute to increasing transparency regarding the clients of banks that have ties to the aggressor state, and to the detection of the hidden presence of the aggressor state on the Ukrainian market.
The Ministry of Finance of Ukraine has approved Order No. 55 dated February 1, 2023, which updated:
- application for registration of the payer of excise tax on the sale of fuel or ethyl alcohol and/or excise warehouses;
- excise invoice P;
- excise invoice C;
- calculation of adjustment of excise invoice P;
- application for replenishment (adjustment) of fuel balance;
- application for replenishment (adjustment) of ethyl alcohol balance;
- Procedure for filling out the excise invoice, calculating the adjustment of the excise invoice, the application for replenishment (adjustment) of the fuel balance, the application for the replenishment (adjustment) of the ethyl alcohol balance.
The order provides:
- the reference to the Classifier of Objects of the Administrative and Territorial System of Ukraine ДК 014-97 was replaced by a reference to the Codifier;
- the excise invoice form ‘P’, the calculation of the adjustment of the excise invoice form ‘P’, the application for replenishment (adjustment) of the fuel balance with a new indication regarding the conditions of taxation - heavy distillates and biodiesel imported into the customs territory of Ukraine or produced in Ukraine, which are taxed according to the conditions, established by item 44 of subsection 5 of chapter XX ‘Transitional provisions’ of the tax Code of Ukraine, if the customer of such fuel according to the terms of the contract is the Ministry of Defense of Ukraine;
- the excise invoice of form “P” was supplemented with two new directions of fuel use – the carrying out of technological tests of manufactured aircraft engines by aircraft construction entities (clarification of the direction of fuel use for aircraft construction entities) and the sale of heavy distillates and biodiesel in accordance with item 44 of subsection 5 of chapter XX ‘Transitional Provisions’ of the Tax Code of the Ministry of Defense of Ukraine;
- in the excise invoices of form ‘P’ and form ‘C’ drawn up for the excise invoice, the indicators of which have been canceled by calculating the adjustment, in addition to the registration number of the registration in the Unified Register of Excise Invoices of the first copy of such invoice, the indicators of which have been canceled, also indicate the date of its compilation;
- it is stated that the changes to the forms of excise invoices, calculation of correction of excise invoices form ‘P’, application for replenishment (correction) of fuel balance in the Procedure for filling out excise invoice, calculation of adjustment of excise invoice, application for replenishment (correction) of fuel balance, application for replenishment (correction) of the remaining ethyl alcohol.
The National Bank of Ukraine by Resolution No. 22 dated March 14, 2023 ‘On approval of the Regulation on the procedure for notification by the auditor of the National Bank of Ukraine of the established facts of violation of legislation, a significant threat, the presence of a modified opinion and available information regarding these facts’ in compliance with the requirements of the Law of Ukraine ‘On introducing changes to some laws of Ukraine regarding improvement of the legal basis of conducting audit activity in Ukraine’ approved the procedure for providing notifications by audit entities.
Auditors will provide information on financial service providers that are public interest entities. This includes all banks, all insurance companies, as well as non-banking financial institutions and legal entities that are not financial institutions but have the right to provide separate financial services, are issuers of securities and/or belong to large enterprises.
In particular, the procedure requires the audit entity to notify the National Bank of the established facts of:
- violation of legislation, including non-compliance with prudential requirements and regulations;
- a significant threat or doubt regarding the financial services provider's ability to continue as a going concern;
- a modified auditor's opinion, etc.
The State Tax Service of Ukraine has reminded about the approval of the new form of the Tourist Tax Declaration (Order of the Ministry of Finance No. 403 of November 30, 2022 ‘On Amendments to the Form of the Tourist Tax Declaration’ with changes made by the Order of the Ministry of Finance No. 446 of December 20,2022 ‘On Amendments to Order No. 403 of the Ministry of Finance of Ukraine of November 30, 2022’ (hereinafter – Orders No. 403, No. 446).
The main changes contained in the new declaration form:
- to ensure the implementation of the Decree of the President of Ukraine No. 180/2021 of April 29, 2021 ‘On the decision of the National Security and Defense Council of Ukraine of April 15, 2021 ‘On state regional policy measures to support the decentralization of power’, the new declaration form provides for the possibility to indicate the Codifier code of administrative-territorial units and territories of territorial communities (KATOTTG) instead of the code for KOATUU (line 2 of the appendix to the declaration);
- to ensure the provisions of para. 49.18.8 of the Tax Code to ensure the possibility of submitting a declaration for the tax (reporting) period, which includes the date of liquidation or reorganization, which does not coincide with the quarterly tax reporting deadlines, the declaration provides for a note about the liquidation/reorganization of the tax agent from the tourist tax.
The new declaration form will be effective from April 1, 2023.
