Ukraine ratified DTA with Cyprus

Ukraine ratified DTA with Cyprus

4 July 2013 Ukrainian Parliament has ratified agreement for the avoidance of double taxation and preventing income tax evasion and its protocol with Cyprus.

The new agreement will replace the current agreement between the governments of Cyprus and the former Soviet Union of 1982.

The new agreement provides for the following taxes:

  • tax rate on dividends Ukrainian businessmen will be 5-15% (in particular 5% of total dividends to be paid by a shareholder owning at least 20% of a company's capital or a shareholder who invested not less than 100,000 euros in the acquisition of shares or other rights of a company. Otherwise, dividends will be taxed at the rate of 15%);
  • tax rate on interest income will be 2%;
  • tax rate on royalties will be 10%.

The agreement also provides for exemption from taxes on gains from the alienation of property owned by the residents of Cyprus in Ukraine.

The new DTA shall be applied to taxes on income received in 2014. The agreement shall enter into force from 2014.

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