Foreign accounts that the tax service will NOT have access to

It has become a fact that storing money in bank accounts in CIS countries is quite unsafe, so many citizens prefer to open foreign accounts.

Some people are concerned about the security of their savings, while others try to hide their income from the tax authorities to avoid paying taxes. Whatever the reason, neither wants their home country to know about their foreign accounts.

But keeping it a secret is becoming increasingly difficult every year, so Ukraine has adopted the Common Reporting Standard (CRS), which allows the Ukrainian tax service to find out what citizens are depositing abroad.

What are the risks of accessing such information, and what consequences might it have for its owners?

This could primarily affect those who failed to pay taxes on income earned abroad and transferred to these accounts. These amounts will likely be subject to taxation at the applicable income tax rate, plus penalties.  

The owners will also be required to report where the funds came from and whether they were obtained through criminal means.

In addition, there's a risk of freezing the accounts of men who evade military service in Ukraine. This procedure is quite complex, but entirely feasible.

How to avoid showing your foreign accounts to the tax authorities?

In this situation, the most pressing question is: how to hide funds in foreign accounts from the tax service?

This is not very difficult to do if you approach the problem creatively, and there are quite a few possible solutions:

Opening an account with a broker means transferring funds from a bank account to one of the stock brokers , and then keeping them on deposit with the brokerage company for as long as necessary.

Today, almost all brokers insure their clients' funds, so their money is reliably protected in the event of a brokerage company's bankruptcy.

In addition, interest is accrued on the deposit, just as when keeping funds in a bank, and if desired, you can invest capital in gold, stocks or bonds.

Brokers do not submit reports on their clients to tax authorities, and an unlimited amount of funds can be stored here.

Cryptocurrency exchange accounts – this option is less reliable than the previous one, but still worth considering.

To implement this, simply register on one of the crypto exchanges and then transfer funds from your bank to your account.

Information about your accounts may be shared with tax authorities only upon specific request. Depending on your residency, exchanges may require a tax return.

Storing funds in payment systems – e-wallets such as Wise, WebMoney, and Payoneer. This option is more suitable for short-term storage, as funds on these platforms are protected only by the word of their owners.

You may be asked questions when receiving large sums of money; supporting documents are usually requested if the transfer amount exceeds 10,000 euros.

Besides the options listed above, cryptocurrency wallets are also available, but they're a rather risky way to store money, especially for large sums. Besides the risk of hacking, there's also a high risk associated with the cryptocurrency itself, which can lose value at any time.