• Ratification of the Double Tax Treaty Between Cyprus and Ukraine
  • July 30, 2013
  • Law Firm: Andreas P. Demetriades Associates - Advocates Legal Tax Consultants - Law Firm - Nicosia Office
  • The new Double Tax Treaty between Cyprus and Ukraine, which was signed in November 2012 and ratified by the Cyprus government in March 2013, was also finally ratified by the Ukrainian Parliament in July 2013.

     

    The new Treaty will enter into force on the date, the two Countries exchange notification of ratification which is expected to occur before the end of the year.

    In this case, the provisions of the new treaty will come into effect from 1 January 2014, date on which the old Treaty between Cyprus and the USSR, as adopted by Cyprus and Ukraine, will be terminated.

    The most significant provisions of the new treaty are highlighted below:

    Withholding Tax rates:


    Dividends:

    • 5% - if the beneficial owner holds at least 20% of the capital of the dividend paying company or has invested in the acquisition of shares or other rights of the dividend paying company of at least €100,000.
    • 15% -In all other cases.

    Interest:

    • 2%.

    Royalties:

    • 5% - in respect of royalties from copyrights of scientific work, patents,trademarks, secret formulae or processes or information concerning industrial,commercial or scientific experiences.
    • 10% -in all other cases.

    Please note that under the provisions of its domestic legislation, Cyprus does not impose any withholding tax for dividends and interest as well as for royalties for use outside Cyprus.


    Capital Gains:

    Taxing rights with respect to capital gains arising from a disposal of shares (irrespective of the underlying assets of the company in which the shares are being disposed of) or any other movable property is granted to the State in which the person making the disposal is tax resident.