Business urges the Ministry of Finance to take a proactive stance on the tax residency of Ukrainians abroad

31/ 01/ 2023

According to various data and estimates, 5 to 7 million Ukrainians are currently living abroad due to the full-scale war waged by russia. Moreover, some of them continue to work for Ukrainian enterprises and organizations, thus supporting the countrys economy by paying the necessary taxes and contributions. Unfortunately, the war has been going on for almost a year now, but the issue of tax residency for Ukrainians is still extremely relevant. According to the rules that exist in the vast majority of countries, if Ukrainians stay in another country for more than 183 days, they can be recognized as tax residents of the host country (i.e., subject to taxation both in Ukraine and in the country of actual residence). The European Business Association has already called for the Minister of Finance of Ukraine, the Delegation of Ukraine to the EU, the Organization for Economic Cooperation and Development (OECD), and the Embassies of Ukraine in European countries to assist in resolving this issue in order to avoid increased tax burden on Ukrainians, including in terms of administration requirements. Unfortunately, there are still no specifics, or clarifications regarding this issue, and Ukrainians abroad are still in a difficult situation due to the possible tax residency of the countries where they are currently staying. Anna Derevyanko. EBA Executive Director. From what we hear from companies, the issue of human migration is extremely relevant for business today. Surely, it is not as acute as the issue of blackouts, but it is also at the top list. At the same time, Ukrainians are known for their hard work, creativity, innovation, and level of education, and European countries have already seen this. There is competition for professional human resources, and, for example, EU member states have set a goal to increase the share of the population with higher education by 2030. So, it seems that for Ukraine, especially now, it is very important that people keep their interests centred in Ukraine. After all, there is an important and serious reconstruction process ahead, and every Ukrainian will be important in it. But now we need to support and protect the interests of Ukrainians abroad so that Ukrainians feel supported by Ukraine at all levels and understand that even in such a difficult situation, Ukraine remains with them. And resolving the issue of tax residency would be a clear demonstration of such support. After all, let′s be honest, if Ukrainians also must pay taxes in another country while adapting to a new life there due to the war, some of them, who have already settled, may not return. Therefore, it is crucial to have the proactive position of the Ukrainian authorities, namely the Ministry of Finance of Ukraine. Thus, we can see that the international community is ready to listen, hear and support Ukraine. Therefore, the issue of possible double taxation should not be neglected, instead, proper discussion is urgently needed.

Unfortunately, the war has been going on for almost a year now, but the issue of tax residency for Ukrainians is still extremely relevant. According to the rules that exist in the vast majority of countries, if Ukrainians stay in another country for more than 183 days, they can be recognized as tax residents of the host country (i.e., subject to taxation both in Ukraine and in the country of actual residence).

The European Business Association has already called for the Minister of Finance of Ukraine, the Delegation of Ukraine to the EU, the Organization for Economic Cooperation and Development (OECD), and the Embassies of Ukraine in European countries to assist in resolving this issue in order to avoid increased tax burden on Ukrainians, including in terms of administration requirements. Unfortunately, there are still no specifics, or clarifications regarding this issue, and Ukrainians abroad are still in a difficult situation due to the possible tax residency of the countries where they are currently staying.

Anna Derevyanko EBA Executive Director

From what we hear from companies, the issue of human migration is extremely relevant for business today. Surely, it is not as acute as the issue of blackouts, but it is also at the top list. At the same time, Ukrainians are known for their hard work, creativity, innovation, and level of education, and European countries have already seen this. There is competition for professional human resources, and, for example, EU member states have set a goal to increase the share of the population with higher education by 2030. So, it seems that for Ukraine, especially now, it is very important that people keep their interests centred in Ukraine. After all, there is an important and serious reconstruction process ahead, and every Ukrainian will be important in it. But now we need to support and protect the interests of Ukrainians abroad so that Ukrainians feel supported by Ukraine at all levels and understand that even in such a difficult situation, Ukraine remains with them. And resolving the issue of tax residency would be a clear demonstration of such support. After all, let′s be honest, if Ukrainians also must pay taxes in another country while adapting to a new life there due to the war, some of them, who have already settled, may not return.

Therefore, it is crucial to have the proactive position of the Ukrainian authorities, namely the Ministry of Finance of Ukraine. Thus, we can see that the international community is ready to listen, hear and support Ukraine. Therefore, the issue of possible double taxation should not be neglected, instead, proper discussion is urgently needed.