• Cyprus - Ukraine
    Details of Amending Protocol Become Available


    Details of the amending Protocol to the 2012 Income Tax treaty between Cyprus and Ukraine have become available.

    The Protocol was signed on 11 December 2015.

    In accordance to the amending Protocol, the withholding tax on dividends is amended as follows:

    • 5% if the beneficial owner is a company (other than a partnership) which holds directly at least 20% of the capital of the company paying the dividends and at least has invested in the acquisition of the shares or other rights of the company equivalent of at least 100.000 EURO.
    • 10% in all other cases.

    The Protocol also includes a provision where gains derived by a resident of a Contracting State from the alienation of shares deriving more than 50% of their value directly or indirectly from immovable property situated in the other Contracting State may be taxed in that other State.

    Finally, the protocol provides that if, after 2 July 2015, Ukraine agrees in any Convention for the avoidance of double taxation to grand exemption from Ukrainian tax on dividends or on interest or on royalty payments arising in Ukraine or to apply lower rates of Ukrainian tax on such payments than those provided for in Articles 10, 11, 12 or grants more favourable provisions regarding Article 13 of this Convention, then the Contracting States shall have the right to renegotiate these Articles with a view to the application of such exemption or lower rate or provisions to this Convention or any new or renegotiated Convention.

    The two countries shall notify each other in writing, through diplomatic channels, on the completion of the procedures required by the domestic law for the bringing into force of the Protocol.

    The Protocol shall enter into force on the date of the latter of the notifications referred to above and shall have effect:

    1. in respect of taxes withheld at source, on amounts paid or credited to non-residents either on or after 1st January 2019 or the first day of January of the calendar year next following that in which this Protocol enters into force if this date is later than 1st January 2019; and
    2. in respect of other taxes for taxable years or periods beginning on 1st January 2019 or after the first day of January of the year next following the entry into force of this Protocol if this date is later than 1st January 2019.
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