Bank secrecy in Ukraine threatened

    Company LAWBOOT Lawyers & Consultants keeps track of key changes in legislation around the world , which in this or that sphere of business IT concerns.

    In this article we want to tell you about the sensational news in Ukraine, as well as provide analytics regarding the bill published on the website of the Ministry of Finance of Ukraine, according to which global changes are planned in terms of disclosing bank secrets in Ukraine.

    If the bill is adopted, then IT-employees (and not only) from Ukraine may experience certain difficulties. I will talk about them below.

    Official sources: APDATE: 06/23/2015 were still on the website of the Ministry of Finance, and now, 06/25/2015 removed from there.

    Let's start with changes to the Tax Code:

    1) The term “wealthy person” was introduced . Who is it?

    First: a resident of Ukraine who is the ultimate beneficiary (controller) of a major taxpayer.

    Having drawn an analogy with related legislation, we provide a “decoding” of the definitions:

    beneficiary (controller) - a person who owns 25% of the company's shares / charter capital.
    major taxpayer- a legal entity whose income from all types of activities for the last four consecutive tax (reporting) quarters exceeds five hundred million hryvnias or the total amount of taxes paid to the State Budget of Ukraine on payments controlled by the state fiscal service bodies exceeds twelve million for the same period hryvnia.

    Secondly: Owner of 20% or more of the shares / charter capital of a company that is not a resident of Ukraine (a company registered abroad) and that company has a declared income of more than 10 million euros per year.

    Our analytics:
    This norm does not work now, since the state of Ukraine in fact does not have the authority and legislative grounds to receive tax information about a foreign company. But perhaps this is the first step towards signing a series of Tax Information Exchange Agreements (TIEAs) with other countries.

    Recall that on October 7, 2014, Ukraine and the OECD already signed a memorandum of understanding, which provides for the assistance of the OECD in reforming the tax system of Ukraine, as well as exchanging tax information with other countries.

    Third: a resident of Ukraine whose total annual taxable income for the previous tax (reporting) year should exceed 50 million hryvnias.

    If you do not fall under these criteria (unfortunately ... or fortunately), then let's move on to the next innovation:

    2) According to the same draft law, it is planned to amend Article 62 of the Law of Ukraine “On Banks and Banking Activities”.
    It is planned to grant powers to the State Fiscal Service of Ukraine (tax, in simple words) to receive information from your bank about your bank account : transactions, amounts, purpose of payments, etc.

    Why do you think? (ps I don’t know the answer, but I suppose - “fill the budget through shadow entrepreneurs”)

    Previously, only the Security Service of Ukraine, the Ministry of Internal Affairs of Ukraine, the National Anti-Corruption Bureau of Ukraine, and the Antimonopoly Committee of Ukraine had this right.

    Naturally, all of the above was not up to the “small shadow entrepreneurs”, and their competence was notmonitor the correctness of tax payments , but with the advent of such a tax authority, problems can arise for anyone who accepts payments to their local bank accounts.

    We remind you that individuals are required to declare their income and pay income tax on them (PIT).
    Personal income tax rates here.

    First of all, this can affect representatives of the IT sector , for example, freelancers who work not through the FLP, and accept money not on the same Payoneer abroad, but on a local bank card ... webmasters who also often take money to their personal accounts, etc. ...

    After all, it is no secret that only a few (if any) pay personal income tax on these amounts.

    That this bill will be adopted, we are 99% sure.
    After all, this is one of the main conditions under which the state of Ukraine will receive $ 1 billion from the IMF.

    LAWBOOT Lawyers & Consultants offers you to prepare for an innovation and arm yourself with a tax (e.g. USA), tax-free (same Estonia, HongKong) or offshore (Belize, BVI) foreign company with which you can legally conduct business and take on it money from business activities.

    We are ready to teach you how to conduct business abroad, to create all the necessary tools for the convenient use of a foreign corporate structure.
    The list of jurisdictions is listed on our website

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