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CRS 2025: Tax Authorities See Your Foreign Accounts. What to Do?
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CRS 2025: Tax Authorities Already See Your Foreign Accounts. What to Do?
The era of “banking secrecy” ended yesterday. Let’s be honest: 2024 was the final year of illusions. Many of you hoped that the war would write everything off, that the registries wouldn’t work, or that “no one cares about my card in a Polish bank.”
It is now 2025. Ukraine has already conducted the first mass exchange of tax information under the CRS (Common Reporting Standard). Data for previous reporting periods is already on the Tax Service servers. This is no longer a lawyer’s “scare tactic,” but an Excel spreadsheet on an inspector’s monitor.
The paradox is that Ukrainian business continues to live in the paradigm of the 2010s. It is believed that structuring through an “offshore” entity (even if it’s Cyprus or Estonia) is protection. In the reality of 2025, this is a red rag. The state needs money, and it knows where to look for it: not in safes, but in your foreign accounts.
Article Contents:
Opponent’s Logic: How the Tax Service Analyzes Your Data in 2025
It is a mistake to think that the tax office will check every entrepreneur (FOP) with a Revolut card. They don’t have the resources for that. The system works differently — through risk-oriented approach algorithms.
The inspector does not search manually. The system automatically cross-references two datasets:
- Your tax declaration in Ukraine (often showing “minimum wage” or zero income).
- The CRS report from a foreign bank (showing, for example, a balance of 200,000 euros or regular inflows).
Legal Hack: “Income Disparity”
If the system sees a gap between official income in Ukraine and balances abroad, “sleep mode” turns off and “Request for Information” mode turns on. Next comes Article 39-2 of the Tax Code (CFC rules) and fines, which in 2025 are no longer just “educational.”
The “Passive Income” Trap and CFC
The biggest pain for our clients right now is the automatic recognition of foreign companies as Controlled Foreign Companies (CFCs) based on bank data. Banks report not only balances but also the type of income.
If your Estonian company receives royalties, interest, or dividends, and the bank marks it as a Passive NFE (Passive Non-Financial Entity), the information flies not to Estonia, but directly to you, as the beneficiary in Ukraine.
In 2025, at LBA, we are seeing a wave of inquiries from the tax authorities specifically regarding beneficiaries who did not submit CFC reports, believing that the company was “inactive.”
In practice, this is a trap. You thought the company was “sleeping,” but the bank accrued 2 euros of interest on the balance. This is passive income. This is a trigger for exchange. This is a fine for failure to submit a CFC report (which now amounts to hundreds of thousands of hryvnias). Read more about fines in the Tax Code of Ukraine (Art. 39-3).
Does Changing Tax Residency Save You?
Many tried to “escape” Ukrainian residency in 2023-2024 by obtaining temporary protection status in the EU. In 2025, we see how this strategy is breaking down.
Why? Because the principle of the Center of Vital Interests works.
If your family is in Spain, but your main business, real estate, and source of income are in Ukraine, the Ukrainian tax authorities (and, worse, the Spanish ones too) will consider you theirs. At LBA, we regularly conduct residency audits so that the client does not end up in a double taxation situation where they have to pay both here and there because CRS “exposed” you to both jurisdictions.
FAQ: Questions Asked During Consultations
1. Does the tax office see the movement of funds (transactions) or just the balance?
The CRS standard provides for the transmission of information on the balance at the end of the year and the total amount of credits (Gross Income). There is no detailed statement with payment purposes (“for coffee”, “for rent”) in the first package. But if discrepancies are found, the Tax Service will send an individual request, and then the bank will disclose everything.
2. Do payment systems like Wise, Payoneer transmit data?
Yes. In 2025, this is already an accomplished fact. They are accountable financial institutions. If you opened an account there as a resident of Ukraine, the data will go to Ukraine.
3. I have less than $250,000 in my account. Am I safe?
The myth about the “250k limit” applies only to the verification of existing accounts of legal entities at the start of the exchange. For individuals and new accounts, the verification is total, regardless of the amount. Even 100 euros in an account are subject to reporting.
Conclusions
In 2025, the strategy to “hide” is a suicide strategy. Transparency is the new currency. If your ownership structure is built on 2019 schemes, you are already in the crosshairs.
The logic of the tax office is simple: find a discrepancy and charge additional tax. Our logic at LBA: build a structure so that even with full disclosure of information, you do not face tax risks. Don’t wait for a “happiness letter” (audit notice). Conduct a Tax Health Check today.
You can order a structure and CRS risk audit at Law Business Association via the links below.
About the Author
Denys Fedorkin — Managing Partner of the law firm Law Business Association (LBA). Expert in tax structuring, asset protection, and anti-raiding.
He has 17 years of experience in accompanying complex cases for business and private clients. He specializes in building safe legal models in the conditions of turbulence in Ukrainian legislation.
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