The Ministry of Finance of Ukraine recently published a draft bill aiming to establish heightened tax reporting requirements for high-net-worth individuals (the "Bill").

The persons who may fall within the scope of the Bill are Ukrainian tax residents who meet one (or more) of the following criteria (the "Wealthy Individuals"):

  • She/He is an ultimate beneficial owner of a large taxpayer;
  • either directly or indirectly holds 10% (or more) of the authorized capital or voting rights in a non-resident legal entity and has declared (or received) EUR 10 million (or more) of income in the previous tax year;
  • the total amount of annual taxable income in the previous tax year exceeds UAH 50 million.

If adopted, the Bill will substantially change some of the key tax procedures applicable to the Wealthy Individuals. In particular, the most noteworthy changes are expected to include:

  • the mandatory filing of the tax returns by the Wealthy Individuals on an annual basis;
  • the authorization of Ukrainian tax authorities to request from banks information on balance of funds that belong to the Wealthy Individuals and information on their debit or credit transactions;
  • the extended 10-year look-back period for tax audits (i.e., the Ukrainian tax authorities will be entitled to examine up to last ten years of tax filings);
  • stricter penalties for a failure to submit or late submission of tax returns – 10% of the amount of tax.

The Bill is currently undergoing public discussion stage. We will keep you posted on the developments.