Dear Clients,
Recent Developments.
On April 22nd 2015, the Cabinet of Ministers of Ukraine approved the draft intergovernmental
agreement with the U:S: Government on the Improvement of Tax Compliance and Implementation
of the U:S. Foreign Account Tax Compliance Act ( FATCA) (the IGA ) authorizing the Minister of
finance of Ukraine to sign the agreement.
Implications
By signing the IGA, Ukraine undertakes to report to the U:S: Internal Revenues Service ( IRS )
targeted information about the U.S. accounts maintained by and all financial institutions based
in Ukraine.
Under the IGA, Ukraine financial institutions would have to report the targeted information about the
U:S: accounts maintained by such institutions, likely, to the Ministry of Finance of Ukraine, which
in turn, would report such information to the IRS on an automatics basis.
While the IGA raises the FATCA obligations to the intergovernmental level, 117 Ukrainian banks and
financial institutions have already voluntarily registered with the IRS with a view to qualifying as
cooperating financial institutions and introduced the FATCA related requirements in their internal
procedures, The signing of the IGA is supposed to Kick-off the process of Implementation of the
appropriate Ukrainian legislation that is expected to remove all concerns as regards the compliance
by Ukrainian banks with the local legislation when reporting individually to the IRS.
FATCA was enacted in 2010 by the U.S. Congress to target non-compliance by U.S. taxpayers using
foreign accounts, FATCA requires foreign financial institutions to report to the IRS information about
financial accounts held by U.S. taxpayers. Or by foreign entities in which U.S. taxpayers hold a substantial
ownership interest.
On June 26, 2014. Ukraine undertook to conclude on GA for implementation of FATCA.
Should you need any clarification, please do not hesitate to contact us at : info@cardwell-capital.com
Kind Regards
Cardwell Advisory Desk.
