21 Nov 2023 13:31

Ukrainian Finance Ministry notifies financial institutions of new reporting rules under CRS

MOSCOW. Nov 21 (Interfax) - The procedure regulating the submission by financial institutions of reports on reportable accounts in line with the Common Standard on Reporting and Due Diligence for Financial Account Information (CRS), approved by the Ukrainian Finance Ministry on September 25, 2023, entered into force on Monday.

"The order stipulates that the first report for the reporting period starting on July 1, 2023 and ending on December 31, 2023 (the first reporting period) shall be submitted by reporting financial institutions by July 1, 2024. Hereafter, the reporting period will be the previous calendar year," Ukrainian media quoted the Finance Ministry as saying in a press release.

The documents sets requirements for the form and the format of such a report and determines a procedure for filling it out and submitting it to the State Tax Service for the subsequent transfer of this information to the relevant authorities in reportable jurisdictions in compliance with the CRS Multilateral Agreement, the ministry said.

The report also shall contain information on all reportable accounts for the reporting period in question. If financial institutions have no financial accounts in the reporting year, or if due diligence procedures do not find any financial accounts held by financial institutions in the reporting year that match the purposes of the CRS Multilateral Agreement, such financial institutions will be required to file a "zero" report.

The report is generated using the CRS XML Schema (v2.0), which was developed by the Organization for Economic Cooperation and Development (OECD) and is used for automatic information exchanges between competent authorities. The XML reporting format will be published on the website of Ukraine's State Tax Service.

The requirements for filling out elements of a report, the description of directories, and the rules for filling out and submitting a corrected CRS XML-format report in line with the requirements set for tax authorities are available on the OECD website.

"The Finance Ministry of Ukraine draws the attention of reporting financial institutions to the requirement to register with the State Tax Service. At the same time, organizations that had the status of reporting financial institutions as of June 30, 2023 have until December 31, 2023 to register with the State Tax Service," it said.

If an organization was not a reporting financial institution as of June 30, 2023 or was set up (registered) after July 1, 2023, it must register with the State Tax Service as a reporting financial institution within 60 calendar days after acquiring this status, the ministry said.

The CRS, or the Common Reporting Standard, is an international standard adopted by the OECD Council on July 15, 2014. It calls on countries participating in it to collect information from their financial institutions on financial accounts and automatically exchange this information with other jurisdictions on an annual basis under the CRS Multilateral Competent Authority Agreement (MCAA).

More than 110 jurisdictions, including European Union member states, were participants in the international multilateral automatic exchange of financial account information as of January 2023.

In order to enable Ukraine to join this international automatic information exchange system, the Ukrainian government forwarded a letter to the OECD Secretariat in August 2021, officially announcing its intention to implement the CRS and to join the CRS Multilateral Agreement.

Pursuant to its international commitments, Ukraine's State Tax Service in August 2022 joined the CRS Multilateral Agreement, which requires the adoption of necessary national legislation and compliance with the requirements of this standard.