On Monday, October 9, Deputy Minister of Finance of Ukraine Sergey Marchenko and the Minister of Economy of the Republic of Turkey Nihat Zeibekci signed the Protocol on amendments to the Agreement on avoidance of double taxation between the two states.
The adopted innovations will allow physical and legal persons to avoid paying double taxes on the income received in the territories of Ukraine and Turkey. This can be achieved with the help of the distribution of the right to tax certain types of income depending on the place of their origin between the two countries, as well as by taking into account the taxes paid in the territory of another state in the tax obligations of the taxpayer of one state.
It is expected that the changes will create better conditions for the investors of both jurisdictions and they will increase the entrepreneurial initiative. The settlement of the issue of international taxation of income in bilateral relations between Ukraine and Turkey will help eliminate tax discrimination, as well as establish cooperation between the tax authorities of the states and the exchange of tax information.
The signed Protocol provides:- expansion of the meaning of the term “resident” according to the provisions of the OECD model Convention;
- increase of the powers of the contractual parties regarding the exchange of tax information without warning about the requirements of the national tax interest or bank secrecy;
- creation of a new article providing for the help for the countries to one another in recovering tax debts.