CRS

CRS – International Standard for Reporting Financial Accounts

On August 19, 2022, Ukraine joined the Multilateral Competent Authority Agreement on Automatic Exchange of Financial Account Information (hereinafter referred to as the CRS Multilateral Agreement). This step enabled Ukraine’s participation in the international system for automatic exchange of information on financial accounts under the Common Reporting Standard (CRS), approved by the Organization for Economic Co-operation and Development (OECD) on July 15, 2014.

On April 28, 2023, the Law of Ukraine No. 2970-IX dated March 20, 2023 "On Amendments to the Tax Code of Ukraine and Other Legislative Acts Concerning Implementation of the International Standard on Automatic Exchange of Information on Financial Accounts" came into effect (hereinafter referred to as Law No. 2970-IX).

According to Law No. 2970-IX, JOINT STOCK COMPANY “NEXENT BANK” (hereinafter referred to as the Bank), as a financial institution, is required to perform due diligence procedures regarding clients' financial accounts. The Bank must identify individuals who are tax residents of other jurisdictions participating in the information exchange within the account holders (and in certain cases among their controlling persons). Information about such accounts is submitted to the State Tax Service of Ukraine in the form of reports on reportable accounts.

To ensure proper due diligence procedures during the establishment of business relations/opening of accounts or data updates, the Bank needs to determine the tax residency of all clients, regardless of whether they are residents of countries included in the list of reportable CRS jurisdictions.

Detailed information:

In order to implement due diligence procedures during the establishment of business relations/opening of accounts or data updates, according to Law No. 2970-IX, the Bank must collect information on clients’ tax residency. For this purpose, all clients are required to submit a completed self-certification form under the Common Reporting Standard.

To inform clients who do not speak Ukrainian about the necessity of the Bank conducting due diligence during the establishment of business relations/opening of accounts or data updates, the following explanatory forms and instructions for completion may be used. These explanatory forms and instructions are only auxiliary tools for completing the corresponding forms in Ukrainian. Please note that these explanatory forms are NOT intended for completion or signing by the client.

- Controlling Person tax residency self-certification form INSTRUCTIONS
- Entity tax residency self-certification form INSTRUCTIONS
- Individual tax residency self-certification form INSTRUCTIONS

For Reference: Each jurisdiction (country) has its own rules for determining tax residency. Jurisdictions have provided information on the OECD automatic exchange portal explaining how to determine whether an individual is a tax resident of a particular jurisdiction. Generally, a person is considered a tax resident of a jurisdiction if, under the legislation of that jurisdiction (including tax treaties), he/she pays or is liable to pay taxes in that jurisdiction based on criteria such as permanent residence, place of effective management, or place of registration, or another similar criterion—not merely based on receiving income sourced from that jurisdiction. Individuals with dual residency may apply tie-breaker rules contained in international treaties (if applicable). For additional information on tax residency, please consult your tax advisor.