On July 29, the Verkhovna Rada adopted bill No. 0001 On ratification of the Agreement between the Government of the United States of America and the Government of Ukraine to improve international tax compliance and to implement FATCA (Foreign Account Tax Compliance Act).
This will allow countries to share information about taxpayers and look for hidden assets.
What is it about
FATCA is the U.S. Foreign Account Tax Compliance Act that took effect in July 2014. It describes the mechanism of interaction between the IRS (the U.S. tax office) and foreign financial organizations.
Parties can automatically exchange data, provided that the countries have concluded an intergovernmental agreement on oversight. The main goal is to find Americans who evade taxation abroad. If there are no contracts, fines may be imposed on transfers on suspicion of tax evasion.
Ukraine has signed an agreement with the United States to improve the implementation of the FATCA in 2017. A new law completes this process. Now the IRS will be able to automatically receive data on the administration of income and taxes of the U.S. taxpayers.
What’s in it for Ukrainians
The head of the parliamentary committee on finance, tax, and customs policy Danylo Hetmantsev is confident that the bill applies to Ukrainians who hide assets in the United States. He is quoted in The Page.:
This mechanism will allow us not only to disclose information about the U.S. taxpayers, about their income in Ukraine, but also it will also provide an opportunity to open mechanisms for our government and tax service to receive information about the assets of Ukrainian citizens that they are hiding abroad so far. These are simple steps to deoffshorization.
