Double Tax Treaties in Ukraine

Updated on Monday 26th August 2013

Ukraine’s economy is based very much on the foreign investments because of the fact that it’s a small country without many resources. The protection of the interests of the non resident investors is the reason why it concluded several double taxation treaties all over the years with many countries such as: Algeria, Armenia, Austria, Azerbaijan, Belarus, Belgium, Brazil, Bulgaria, Canada, China, Croatia, Cyprus, Czech republic, Denmark, Egypt, Estonia, Finland, France, Georgia, Germany, Greece, Hungary, Iceland, India, Indonesia, Iran, Israel, Italy, Japan, Jordan, Kazakhstan, Korea, Kuwait, Kyrgyz Republic, Libya, Latvia, Lebanon, Lithuania, Macedonia, Malaysia, Moldova, Mongolia, Montenegro, Morocco, Netherlands, Norway, Pakistan, Poland, Portugal, Romania, Russia, Serbia, Singapore, Slovakia, Slovenia, South Africa, Spain, Sweden, Switzerland, Syria, Tajikistan, Thailand, Turkey, Turkmenistan,  United Arab Emirates, United Kingdom, United States of America, Uzbekistan and Vietnam.

Through these treaties, the companies with non resident shareholders are taxed only in the country of residence or if it is taxed in Ukraine, it may claim a refund of these taxes. The usual corporate tax of 21% is not paid or it’s paid partially and then refunded.

These treaties are also protecting the interests of the Ukrainian investors in the countries listed above.

The withholding taxes on dividends, interests and royalties paid to non residents have a smaller value or are even exempt from taxation in certain circumstances (owning a large amount of the company’s capital for example) for the treaty countries.

Usually, the withholding taxes for dividends, interests and royalties paid to non residents are 15%.

To take advantage of the treaties’ regulations, besides the standard application, the non resident shareholder (individual or corporate body) must provide a valid tax certificate from the authorized tax authority. This document must certify the fact that the company is already taxed in the shareholders’ country of origin.

If elaborated after the OECD model, the treaties also regulate the exchange of fiscal information between the countries. If not, protocols of exchange of information were signed regarding this matter.

The exchange of information is vital in the avoidance of tax frauds in the treaty countries. 

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