The State Tax Service (STS) of Ukraine has begun receiving automated data on citizens crossing the border. This became possible thanks to a new format of information exchange between agencies. Experts explain how this data will be used and what it means for tax residents.
New Control Mechanism: From Borders to Taxes
A mechanism for automated data exchange between the State Border Guard Service and the State Tax Service has been launched in Ukraine. As reported in official sources, this innovation does not change the rules for citizens crossing the border, but it allows fiscal authorities to more effectively detect tax violations.
The key aspect of this change is the ability to analyze the frequency of Ukrainians' trips abroad. The Tax Service can now take into account information about departures and arrivals when determining the tax residency of individuals.
Tax Residency Criteria: Not Just Border Data
It is important to understand that the mere fact of frequent trips abroad is not an automatic ground for claims by tax authorities. As tax consultant Oleksandra Tomashivska explains in an interview with RBC-Ukraine, crossing the border is just one of many factors.
When determining residency status (a person obligated to pay taxes in Ukraine), the STS conducts a comprehensive assessment. If a citizen claims to reside permanently abroad but returns to Ukraine regularly, the number of such trips may indicate a closer connection to the state.
However, the assessment is not limited to border statistics alone. Tax authorities also analyze:
- Property ties: ownership of housing in Ukraine.
- Family aspect: place of residence of family and close relatives.
- Economic activity: presence of employment, business, or income sources within the territory of Ukraine.
The expert notes that if a family lives together with the person abroad, this becomes a weighty argument in favor of the fact that the center of vital interests has shifted to another country. Conversely, conducting business or working in Ukraine indicates the retention of residency.
Deregistration: Risks and Consequences
One way to minimize arguments about a close connection with Ukraine is to deregister from the place of residence. However, experts warn against thoughtless actions.
«This is a serious step. You need to inform banks; there are other practical consequences. This is a solution for those who truly no longer plan to live in Ukraine», — emphasized Tomashivska. Deregistration may lead to difficulties with banking services and other legal procedures if the person continues to live in the country.
Contradictory Data
There is a widespread misconception regarding the automatic exchange of tax information (CRS). Many Ukrainians mistakenly believe that this mechanism concerns all citizens abroad, regardless of their status.
According to expert clarifications, if a person works and lives permanently with their family in another country, information about them should not be transmitted to Ukraine under the automatic exchange framework, as they are a tax resident of that country. Thus, the automatic exchange works selectively, depending on actual residency, not just the fact of being abroad.
Recommendations for Citizens
In the context of increased control, specialists recommend not relying on individual comments or blog posts. The only reliable guide is the legislation.
«For those who do not understand which situation applies to them, I recommend turning to the legislation. It is the law that defines who is a tax resident and on what grounds», — advises the consultant. Citizens who have doubts about their status are strongly recommended to consult with professional lawyers or tax experts to analyze their specific situation.
