Against the background of the active introduction of more and more countries, the automatic exchange of financial accounting information provided by the multilateral agreement of the competent authorities (“The Multilateral Competent Authority Agreement on Automatic Exchange of Financial Account Information”, abbr. “MCAA”) becomes apparent inevitability of joining in the near future Ukraine’s this agreement.
Recall that the MCAA involves automatic annual exchange of information on the accounts of non-residents between the competent (tax) authorities of countries that have signed the agreement. This fundamental question is the definition of tax residence of the account holder, as the information about it will be sent to the competent tax authorities of the country, the tax which he is a resident.
Tax residency financial institution is determined primarily through independent determination of the account holder, on the basis of the information specified in the documentation to open an account. If the account holder declares the absence of residence for tax purposes, the financial institution determines its residency at the main office location.
It is important to understand that the account holder is the person who carries out real control over the account. If a company uses a real, rather than nominal director and signatory of the account will be the director – he will be recognized as the account holder. Evidence of this may be due to active, indicating that the conduct of business. If the expense of passive, for example, in the case of a holding company, when its main sources of income – it is the dividend, the account holder will be recognized by the beneficiary or other controlling person and account information will be transferred to the tax authorities of the country whose resident he is.
Tax Code of Ukraine defines residents as:
- legal entities and their separate persons, which are formed and operate in accordance with the legislation of Ukraine located both on its territory and beyond its borders;
- Individuals who have a place of residence in Ukraine.
In the case where the person resides not only in Ukraine, the tax code to determine its residence uses criteria such as place of residence, center of vital interests (the place of residence of family members, registration as a business entity, etc.), the number of days on the territory of Ukraine and citizenship. In consideration of each following criteria apply only if the previous could not determine residency.
For example, if the individual has a permanent residence in Ukraine, as well as the place of residence in another country, such a person is considered a resident of Ukraine.
If this is a permanent residence in another country, then a resident of Ukraine, it will be recognized if there is the center of his vital interests (closer personal and economic relations).
If you can not determine the state in which the center of vital interests of the person? or it has no permanent residence in any of the countries, a resident of Ukraine, it will be recognized only if stays on Ukrainian territory for at least 183 days a year.
If the resident status of the person can not be determined using the previous rules, a person is considered a resident if the Ukrainian citizenship. If the Ukrainian citizenship of a natural person is not only a citizen is obliged to pay taxes in Ukraine, and also deprived of the right to offset taxes paid in other countries.
To determine the resident status of stateless persons, if it is impossible to determine in accordance with the above rules, the norms of international law.
This self-definition of a person’s primary residence in the territory of Ukraine or its registration as a self-employed are also sufficient conditions for the Ukrainian residence.
As you can see, to get the status of a tax resident of Ukraine is not difficult (ate this status are no longer set by default). In addition, when necessary, you can easily get a certificate confirming this status, in writing addressed to the tax authority at the location of the legal entity (the place of residence of a natural person). But to give up that status is much more complicated.
Since international agreements on avoidance of double taxation contain the rules for determining the tax residence, such provisions of the Tax Code of Ukraine, for the loss of tax resident status of Ukraine as a rule use is an international agreement. To do this, use the criteria set out above, and take the following steps:
- Select country of residence and registration of long-term visa.
- Getting a job or start their own businesses in the selected country;
- Obtaining a permanent residence permit in the selected country. It is desirable to carry as members of the family;
- Termination of entrepreneurial activity (thus closing SPD) in Ukraine;
- Settlement of all liabilities and claims on the territory of Ukraine. Submission of the final declaration to the tax authority and receiving a certificate of payment of tax on personal income and the absence of tax liability for this tax;
- Removal from the register of residence in Ukraine;
- The issuance of exit permits for permanent residence by putting a passport appropriate mark;
- Statement on the consular register at the consulate of the target country;
- The actual stay in the destination country for more than 182 days a year.