The Ukrainian government has announced a change to the existing agreements on avoidance of double taxation signed with Cyprus.
The revised text will close a loophole that led to the fact that the income from immovable property situated in Ukraine avoid taxation in Ukraine.
Income derived by a Cyprus resident from the sale of shares or other corporate rights will be subject to taxation in Ukraine if more than 50 percent of this revenue is directly or indirectly related to income immovable property situated on the territory of Ukraine.
The minimum rate on dividends is increased from two percent to five percent. This low rate is used when the recipient owns 20 or more percent of the company distributing dividends and investment at least EUR 100,000 to obtain holding.
The tax rate of ten percent is used otherwise.
The revised section on dividends will come into effect not earlier than 1 January 2019. Other changes proposed to bring in agreement with the latest international tax standards developed by the Organization for Economic Cooperation and Development.
The amendment has been sent to the Ukrainian legislators for approval.