Don't try to hide foreign accounts from the tax authorities!

According to Dutch laws, everyone registered in the Netherlands are tax residents of this country and are required to pay taxes, including on foreign income, savings and investments. The desire to pay less taxes is understandable, but it is almost impossible to hide the presence of foreign accounts. Countries that have signed the Convention on Mutual Administrative Assistance in Tax Matters provide information about accounts opened on their territory to other signatory countries. In 2024, information about accounts opened in Ukraine will become available to convention participants. At the same time, the Ukrainian tax authorities will have access to information about accounts of Ukrainian residents opened in foreign banks.

Convention on Mutual Administrative Assistance in Tax Matters

The Convention was jointly developed by the Council of Europe and the Organization for Economic Development and Cooperation and has been available for signature since January 25, 1988. Ukraine signed the convention in 2004, however changes in legislatione, necessary for the exchange of information about accounts with other states, was adopted only on March 20, 2023. 

Currently there are 195 independent states in the world. 120 of them have already signed the convention, that is, most countries already provide information about accounts opened on their territory to other participating states. We are talking about all types of financial accounts: bank, brokerage, investment, etc.

In accordance with the Common Reporting Standard (CRS), automatic exchange of information occurs on the accounts of all residents of participating countries - both individuals and entrepreneurs and companies. As part of a multilateral exchange, information about accounts and their balances is provided, regardless of the amounts, although there is a division into:

• accounts with low value - $1 or less at the end of the reporting year,
• accounts with a high value - over $1 at the end of the reporting year.

What changes are expected in the availability of information about Ukrainian accounts

According to the information posted on the website of the Ministry of Finance of Ukraine, information about Ukrainian accounts will become available to partner countries in two stages:

1. on all new (opened from July 1, 2023) accounts and high-value accounts with individuals - no later than September 30, 2024,
2. on accounts opened before July 1, 2023, low-value accounts of individuals and corporate accounts - no later than September 30, 2025.  

That is, the first period for which information will be exchanged is July 1, 2023 – December 31, 2023. 

In tax returns, information about foreign savings and investments must be reflected in Box 3. To avoid errors, entrust filing the declaration to specialists!