State Tax Service of Ukraine informs that Order of the Ministry of Finance of Ukraine № 408 as of 30.11.2022, which approved Procedure for provision by the trust founder, owner of a share of the property fund, institution, other entity without the legal entity’s status, at request of the controlling body of written confirmation regarding compliance with conditions provided for in Sub-paragraph 392.1.5.1 of Sub-paragraph 392.1.5 Paragraph 392.1 Article 392 Section I of the Tax Code of Ukraine (hereinafter – Procedure) entered into force on 10.02.2023.
This procedure determines organizational and legal basis for providing the above-specified written confirmation.
Effect of Procedure is applicable to individuals-residents of Ukraine or legal entities-residents of Ukraine, who are the trust founders, owners of a share of the property fund, institution and other entity without the legal entity’s status.
Entities without the legal entity’s status include, in particular, but not exclusively, trusts (as a form of property contractual relations both with and without the tax resident’s status of one county), foundations, institutions and other non-resident individuals, organizational and legal form of which is included in the list1, approved by the Cabinet of Ministers of Ukraine according to Sub-paragraph "g" of Sub-paragraph. 39.2.1.1 of Sub-paragraph 39.2.1 Paragraph 39.2 Article 39 of the Tax Code of Ukraine (hereinafter – Code), which according to the personal law are not legal entities.
Individual is considered to own a share in another legal entity, if such individual is the trust founder, owner of a share of the property fund, institution and other entity without the legal entity’s status, whose assets include the specified share or a participant (partner with full or limited liability) of partnership assets of which include share in the legal entity. Founder of trust, institution and other entity without the legal entity’s status, whose assets include the specified share in the legal entity, is not considered to be owner of this share, if both conditions specified in Sub-paragraph 392.1.5.1 Article 392 of the Code are met.
Paragraph 1 Section II of Procedure stipulates that the controlling body has a right to request such individual to provide written and documentary confirmation of compliance with conditions stipulated by such controlling body.
Request is considered duly delivered if it is sent in manner specified in Article 42 of the Code.
Trust founder, owner of a share of the property fund, institution and other entity without the legal entity’s status must submit the following documents along with written confirmation:
- notification of individual who manages and/or controls foreign entity without the legal entity’s status (in particular, but not exclusively, trust manager) (hereinafter – Notification);
- extract from the trust agreement in the form of information regarding name of the trust founder, trust manager, protector (if appointed), beneficiary/beneficiaries (if appointed/appointed) and information, specified in Sub-paragraph 392.1.5 Paragraph 392.1 Article 392 of the Code, under the notarized signature of individual who manages and/or controls foreign entity without the legal entity’s status, and if such individual is not regulated and/or licensed, then the notarized signature of such individual’s administrator who is regulated and/or licensed according to the personal law (hereinafter – Extract);
- legal conclusion addressed to the founder, according to legislation of the country of establishment of the discretionary irrevocable trust, confirming information specified Sub-paragraph 392.1.5 Paragraph 392.1 Article 392 of the Code, provided by the law firm or other individual who has a right to provide legal or advocacy services, whose activities are subject to mandatory licensing or regulation according to the personal law (hereinafter – Legal conclusion). Signatures of individuals must be notarized.
Notification is given to the trust manager, trustee/title owner, other nominal holder (nominal owner) with indication of information about other individual/individuals who manage and/or control foreign entity without the legal entity’s status (if any), or another individual who is appointed to control actions of individual/individuals who manage and/or control foreign entity without the legal entity’s status (if any).
Notification, Extract and Legal conclusion must be properly legalized according to requirements of Ukrainian legislation.
Controlling body asks the taxpayer (with his/her consent) to provide properly executed translation in Ukrainian language of documents specified in Sub-paragraph 392.1.5.3 of Sub-paragraph 392.1.5Paragraph 392.1 Article 392 of the Code.
Written confirmation is sent to the controlling body within one month from the date of receipt of relevant request by the taxpayer.
Controlling body has a the right to direct individual, specified in Sub-paragraph 392.1.5.1 of Sub-paragraph 392.1.5 Paragraph 392.1 Article 392 of the Code, a request to provide documentary evidence or extracts from documentation regarding information specified in Notification and Legal conclusion.
Reference
1 is a List of organizational and legal forms of non-residents who do not pay income tax (corporate tax), including tax on income received outside the registration country of such non-residents, and/or are not tax residents of country in which they are registered as legal entities, approved by Resolution of the CMU № 480 as of 04.07.2017.