Exchange of information on company accounts under CRS

Accounts of the reported companies

Financial institutions where companies have accounts are required to report and transmit information to the tax authorities if the following conditions are met:

• the aggregate balance or value of the account exceeds USD 250,000 as of December 31;
• the account is held by a company that is a resident of a CRS reporting jurisdiction, or
• the account is held by a passive non-financial organization whose controlling persons (participants/beneficiaries) are residents of a CRS reporting jurisdiction.

A legal entity is considered a passive non-financial organization if:

• more than 50% of its gross income is passive income (e.g., interest, dividends, royalties, etc.), or
• it has the status of an investment company with the relevant peculiarities.

The expected date of the next exchange of information is September 30, 2025.

The list of countries participating in the CRS agreement is available here.

Identify accountable accounts

How to identify accounts subject to reporting:

• determining whether a company is accountable;
• determining whether an organization is a passive non-financial organization with relevant controlling persons.

The verification is carried out on the basis of a self-assessment document from the account holder/controlling person, information in accordance with AML/KYC procedures, etc.

Under what conditions are accounts not audited and reported

An account of a company whose aggregate balance or value does not exceed USD 250,000 as of December 31 is not subject to audit, detection or reporting until it exceeds USD 250,000 as of the last day of any subsequent calendar year.

Conclusions

Thus, to determine whether a company’s account is accountable, the following is taken into account: the amount of the account balance (the balance, not the turnover), the residency status of the company/controlling persons, and the status of a passive non-financial organization.

Ukraine is a party to the CRS agreement. Accordingly, if the controlling person of a foreign company is a tax resident of Ukraine, the company is a passive non-financial organization with an account balance of more than USD 250,000 (as of December 31), information about the company’s account may be transferred to the tax authorities of Ukraine.

Before opening an account, we recommend that you verify the status of both the company’s controlling persons (participants/ultimate beneficial owners) and the company itself.