Cyprus and Ukraine signed the Double Tax Treaty

On the 8th of November 2012, the representatives of Cyprus and Ukraine signed the Double Tax Treaty in order to replace the existing one which dates back to the 1982 and was concluded with the USSR.

The DTT will come into effect on 1st of January following the year in which the parties exchange notifications of ratification.

The most important changes are the following:

  • the withholding tax rate on dividends which is 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 euro.  In all other cases the withholding tax rate is 15%.
  • The withholding tax rate on interest is 2%.
  • The withholding tax rate on royalties is respect of any scientific work, patent, copyright, trade mark, secret formula, commercial or scientific experience is 5% and 10% in all other case.
  • Tax rights in respect to capital gains arising from a disposal of shares or to any other movable property, is granted to the State in which the person making the disposal is tax resident.

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