​The Cabinet of Ministers has decided to request the Parliament for the ratification of the Agreement with the US Government on the application of the US Foreign Account Tax Compliance Act (FATCA)

3/22/18


On March 21, 2018, the Cabinet of Ministers of Ukraine adopted the resolution “On the Request to the Parliament of Ukraine for the Ratification of the Agreement between the Governments of Ukraine and the USA on the Improved Execution of Tax Regulations and Application of the US Foreign Account Tax Compliance Act (FATCA)”. Also, the Cabinet of Ministers approved a draft law on the ratification of the mentioned Agreement as well as draft laws on amendments to the Tax Code of Ukraine and some other laws of Ukraine regarding the Agreement’s ratification.

What’s it about?

The draft law on the Agreement’s ratification is aimed to finalize internal procedures necessary for the Agreement to be enacted.
The draft law on amendments to the Tax Code of Ukraine stipulates the following:

definition of the terms “reportable account and its owners, financial agent and financial account”;

specific of reporting for reportable accounts;

collection and retrieval of tax information by tax authorities from tax agents;

fines for failure to submit reports for reportable accounts, submission of these reports with violations or with incorrect data or mistakes (this regulation is primarily designed to stimulate financial agents to comply with the legislation requiring reports for reportable accounts).

The draft law on amendments to some of the laws of Ukraine contains amendments to:
- the Law of Ukraine “On Banks and Banking” in regard to the procedure for the disclosure of bank secret;
- the Law of Ukraine “On the Depositary System of Ukraine” in regard to access to information contained in the depositary system.
The above amendments to the laws of Ukraine will make it possible to exchange information not only within the FATCA Agreement, but also in line with other international agreements containing regulations on information exchange for tax purposes which are acknowledged as mandatory by the Parliament of Ukraine or which were signed on the basis of inter-institutional agreements including those stipulating automated information exchange according to the reporting standard CRS.

What comes next?

The Agreement on FATCA is to be ratified by the Parliament of Ukraine which shall adopt necessary legislation.

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