Financial agents, attention! Deadlines for submission of reports on data accounts under the FATCA Agreement for the tax year 2019 have been postponed

Press service of the State Tax Service of Ukraine, published 26 August 2020 at 12:59 Chapter: News

In order to ensure the implementation of Ukraine’s international obligations under the Agreement between the Government of Ukraine and the Government of the United States of America to improve tax compliance and application of the US Law “On the Foreign Account Tax Compliance Act” (FATCA) (hereinafter – the FATCA Agreement), the State Tax Service of Ukraine notifies about receipt of such information from the Ministry of Finance of Ukraine.

Official website of the US Internal Revenue Service contains published notification of postponement in connection with COVID-19 deadlines for reporting on data accounts under the FATCA Agreement for tax year 2019 to the competent authorities of countries reporting under the IGA 1 model, including Ukraine for the period up to December 31, 2020. Notification is published at the link:

https://www.irs.gov/newsroom/irs-grants-extension-of-time-to-file-fatca-information-returns.

In addition, Letter of the US Treasury Department dated 07.08.2020 announced that according to the US Treasury regulations (TD 9610, 78 Fed. Reg. 5873), the deadline for submission of reports for all reporting countries, including Ukraine, has been extended to December 31, 2020.

Specified decisions, taken by the US Treasury Department, change the timing of Ukraine’s international obligations under Paragraph 5 Article 3 of the FATCA Agreement to provide the US Internal Revenue Service with information on data accounts by September 30, 2020 – which in turn changes the reporting deadlines for financial agents.

According to Paragraph 69.8.3 Article 69 of the Tax Code of Ukraine, financial agents are obliged to annually submit a report on data accounts to the central body of executive power which implements the state tax policy by September 1.

According to Paragraph 3.2 Article 3 of the Code, if an international agreement, the binding nature of which has been approved by the Verkhovna Rada of Ukraine, establishes rules other than those provided for by this Code, subsequently rules of the international agreement must be applicable.

Sub-paragraph b) Paragraph 6 Article 4 of the Agreement between the Government of Ukraine and the Government of the United States of America to improve tax compliance and application of the US Law “On the Foreign Account Tax Compliance Act” (FATCA) stipulates that notwithstanding Paragraph 3 and 5 Article 3 of this Agreement, Ukraine does not undertake to start exchanging information before the date by which foreign financial institutions are required to submit such information to the Internal Revenue Service in accordance with US Treasury Department regulations.

Given the above mentioned, for the State Tax Service of Ukraine, which is a competent authority for the purposes of automatic exchange of information under the FATCA Agreement, the deadline for submission of reports to the US Internal Revenue Service for the tax year 2019  has been extended to December 31, 2020. Due to the fact that the Code sets a reporting deadline for financial agents, which provides the competent authority with a month to process and verify provided information, the deadline for financial agents to submit a report on data accounts is extended to December 1, 2020. Before this date, financial agents must submit through the IDES portal (International Data Exchange Service) to the State Tax Service of Ukraine (central executive body that implements the state tax policy) reports on data accounts for 2019 and information related to reporting periods from 2014 to 2018 according to provisions of the FATCA Agreement.

Procedure for filling in and submitting a report on data accounts by financial agents according to the Agreement between the Government of Ukraine and the Government of the United States of America to improve tax compliance and application of the US Law “On the Foreign Account Tax Compliance Act” (FATCA) has been approved by the Order of the Ministry of Finance of Ukraine dated 12.08.2020 № 496, registered at the Ministry of Justice of Ukraine dated 20.08.2020 for № 810/35093.