Cabinet of Ministers wants tighter control over the money of wealthy Ukrainians

Published 20 July 2018. Some rules have changed since; ask us for the current position.

The Cabinet of Ministers has discussed tighter control over the money of wealthy Ukrainians. If the Ministry of Finance manages to draft a dedicated bill, all wealthy Ukrainians will be under close scrutiny from the tax authorities from January 2019.

The Ministry of Finance has prepared such a bill. According to Halyna Kolchanova, a high-income taxpayer will have to meet the following criteria:

1. Be a beneficial owner and belong to the category of large taxpayers.
2. People with capital above EUR 10 thousand will also count as wealthy. This will also apply to residents of other countries whose income exceeds EUR 1 million.
3. Another ground for treating a Ukrainian as wealthy is annual income above UAH 50 million. Once a taxpayer is classed as a high-income individual, this will be shown in a state register.

The bill will introduce a fine for late payment of tax due under a return: 10% of the tax assessed. The tax authorities will also be able to audit the returns of wealthy Ukrainians.

Under the draft, the tax authorities will have the right to check all the data in a tax return for 3,650 days, that is ten years. The bill is still being revised, with an improved version promised in September. Its author admits that getting it through Parliament will not be easy, as several major issues need to be resolved first. In particular, bank secrecy will have to be lifted, and the powers of the tax authorities over such taxpayers will need to be defined.