State Tax Service Is Preparing for the International Automatic Exchange of Information under the CRS

The Ministry of Finance announced that the development of software for the State Tax Service has been completed, which will provide international automatic exchange of information according to the Common Reporting Standard (CRS) and the Country-by-Country Reporting (CbCR) standard with more than 100 foreign tax administrations.

The initiative was implemented through the cooperation of the Ministry of Finance, the State Tax Service and the European Union Program for the Support of Public Finance Management in Ukraine (EU4PFM). Cooperation with the EU4PFM Project is aimed at supporting the process of implementation of international standards on transparency and information exchange in Ukraine with the purpose of successful introduction of international cooperation instruments in the tax field.

From now on, the STS, as the competent authority of Ukraine for the purposes of international automatic exchange, has the technical capacity (taking into account the norms of the Tax Code and the requirements of international standards) to start the first exchanges with the tax authorities of jurisdictions that are participants in relevant international multilateral agreements.

The first exchange of information on financial accounts under the CRS will take place in 2024 for the second half of 2023 (the first reporting period). Further, the previous calendar year will be considered the reporting period.

As a reminder, according to BEPS Action 13 (Base Erosion and Profit Shifting), all large multinational enterprises are required to prepare reports by country (Country-by-Country Reporting, CbC) that contain data on global distribution income, profits, taxes paid and economic activity occurring between the tax jurisdictions in which they operate. The CbC report is provided to tax administrations in these jurisdictions for use in transfer pricing and BEPS risk assessment.