Ukrainian migrant workers annually transfer several billion dollars from abroad
Journalists from Deutsche Welle turned for clarification to a tax lawyer, member of the Ukrainian Bar Association, Anton Podilchak.
– Explain, please, can Ukraine tax citizens who officially work abroad and pay taxes there?
– If we are talking about people who are officially employed abroad and who pay taxes there, they have nothing to worry about. Especially if they have already paid taxes once and work in a country with which Ukraine has signed an agreement on the avoidance of double taxation. With most countries where Ukrainian migrant workers go, such agreements exist. And since Ukraine seeks to join the European Union, it must integrate its legislation into the EU legal framework and not allow double taxation.
At the same time, a citizen has the right to choose the tax jurisdiction, i.e., to choose the country where he has his main center of vital interests for tax payment. Usually, such a center of interests is calculated by the number of days a person stays in a particular country. That is, if you have a salary in Ukraine and a salary in Poland, but you live 181 days a year in Ukraine, then you can even tax your Polish income in Ukraine. If you spend more time in another country, accordingly, it is better to pay taxes there.
– If it still happens that a person is forced to pay taxes twice, what should he do in this case, what mechanisms of protection does he have?
– The international community professes the principle of responsibility and does not assume that anyone can fail to fulfill the agreement on the avoidance of double taxation. Although in my practice there have actually been cases where people fell under double taxation. For example, IT workers who work in Ukraine and also abroad at the same time. And there were cases when Polish tax authorities demanded that they pay all taxes, including on income in Ukraine. Then they had to prove that they had paid them in Ukraine.
The most important thing in such controversial issues for every Ukrainian who receives income abroad is to be ready to provide documents that such taxes were paid in one country or another. Obtaining such documents abroad is not difficult. To do this, you need to contact the fiscal authority of the country and ask for a certificate of the amount of accrued income and the tax paid on it.
– So far we have been talking about people who work legally in other countries. Does Ukraine have the ability to collect taxes from those who work abroad illegally?
– To catch an illegal migrant worker, Ukraine has very few tools. We see how the authorities are now trying to "whiten" the Ukrainian salary market and how difficult it is. Ukrainians currently do not have a culture of paying taxes. Therefore, the same situation is with illegal migrant workers. It remains to rely only on their good will, good faith. Although I personally believe that the state has a moral right to ask illegal workers to tax their income in Ukraine. To do this, they only need to enter their earnings in the income declaration and submit it to the tax authorities.
– What mechanisms does the state have to verify citizens' incomes?
– In the world, there is a trend towards reducing the role of banking secrecy in cases where the interests of the state are concerned. In Ukraine, banking networks are increasingly used for transferring funds, and the state is trying to monitor such things more and more.
For example, the state already has access to the accounts of individuals who are also individual entrepreneurs, since in this way they can hide money from taxation in other accounts. A similar mechanism can be applied to illegal Ukrainians who may transfer money through Western Union or other electronic banking networks to Ukraine.
It may happen that one fine day the tax office will conduct an inspection, or some ill-wisher will report, and the tax office will ask you to provide information. If it sees that you have a lot of income coming from abroad, it will be interested in where it comes from. And then, of course, if you cannot show where this income comes from, you may be asked to pay tax. But again, I emphasize: those who honestly paid taxes abroad will not have their money taken away in Ukraine.