Tax amnesty in the form of a one-time (special) declaration in Ukraine

Yuriy Tsyganok, partner of Crowe AVR, Ukraine

From September 1, 2021, in Ukraine will start a one-time (special) voluntary declaration by individuals of their assets located on the territory of Ukraine and abroad, if such assets were received by an individual from income that at the time of their accrual was taxable in Ukraine and from which no taxes and fees were paid until January 1, 2021.

That is, in fact, it is a tax amnesty for resident individuals (as well as those who were residents at the time of receipt of the objects of declaration or at the time of accrual of income from which the objects of the declaration were received) who "gained" assets in Ukraine and abroad without paying taxes. But not free - with a one-time declaration you need to pay a special fee, the rate of which varies from 2.5% to 9% and depends on the type and location of the asset.

This declaration will last until September 1, 2022.

What assets are subject to a one-time voluntary declaration?

Such assets include, in particular:

  • currency values (except for cash) and monetary claims;
  • real estate (land plots, residential and non-residential real estate, as well as individual objects of unfinished construction);
  • movable property, including vehicles and other self-propelled machines and mechanisms, other valuable movable property (art and antiques, precious metals, precious stones, jewelry, etc.);
  • shares (units) in the property of legal entities or in entities without the status of a legal entity, other corporate rights, property rights to intellectual property;
  • securities and/or financial instruments specified by law;
  • rights to receive dividends, interest or other similar property benefits not related to the ownership of securities, shares (units) in the property of legal entities and/or in entities without the status of a legal entity;
  • other assets of an individual.

Cash can be declared only by pre-crediting it to a current account, with a special regime of use in Ukrainian banks. Moreover, banks are obliged to conduct a financial monitoring procedure on the sources of such funds.At the same time do not require declaration (it will be considered that taxes and fees are fully paid):

  • assets, the total value of which does not exceed UAH 400 thousand as of 31.08.2022, except for the following;
  • real estate located on the territory of Ukraine, which as of 31.08.2022 belonged to a natural person on the right of ownership (apartments up to 120 sq. M, residential buildings up to 240 sq. M or unfinished construction up to 240 sq. M, provided that natural persons of the property right to the land plot of the corresponding purpose);
  • non-residential real estate up to 60 square meters;• land plots, the total size of which for each individual plot does not exceed the norm of gratuitous transfer;
  • one vehicle for personal non-commercial use (except for a vehicle of not more than 9 persons, including a driver, a car with an engine capacity of not less than 3000 cc and / or an average market value of more than UAH 400 thousand, a motorcycle with a working capacity of engine cylinders over 800 cc, aircraft, helicopter, yacht, boat).

Of course, the tax amnesty does not cover assets obtained as a result of criminal acts (except for evasion of taxes and fees, SSC, as well as violations in the field of currency and antitrust law, because it is for them that the amnesty will be introduced).

And the amnesty does not apply to assets that are in the accounts of financial institutions and/or located in the territory of a country recognized by the aggressor state in accordance with the law, or have sources of origin from such a country.