The Government of Ukraine will send a letter to all tax authorities and governments of the EU countries with a request to apply the “covid precedent”, when many people were forced to leave their countries of tax residence due to the cancellation of flights, and the “tax rule” was not applied to them. residency 180 days”.
This decision was made by the Economic Headquarters under the Ministry of Economy at a meeting on Thursday, its member Mikhail Kukhar said on Facebook.
According to him, the letter will be signed by First Deputy Prime Minister – Economy Minister Yulia Sviridenko, who heads the Economic Staff and approved such a proposal.
Kukhar added that changes are also being prepared to the relevant instructions of the National Bank and the State Tax Service to allow Ukrainian individual entrepreneurs to open accounts in foreign banks.
As previously reported, the European Business Association called on the government to resolve the issue of tax residence of Ukrainian citizens abroad, since staying outside the country for more than 183 days, they can be recognized as residents of the host country and there will be a risk of double taxation.
According to the UN, at present, most of the Ukrainian refugees to Europe received the status of temporary protection in Poland – 1 million 274.1 thousand, Germany – 670 thousand, the Czech Republic – 413 thousand, Italy – 150.3 thousand, Spain – 133.8 thousand, Bulgaria – 129.4 thousand, France – 96.5 thousand, Slovakia – 86.8 thousand and Austria – 78.2 thousand.
Most of them left Ukraine at the end of February and March.
The Verkhovna Rada has ratified the protocol on amending the convention between Ukraine and the Netherlands on double taxation avoidance and prevention of tax evasion with respect to taxes on income and property.
According to these changes, the general rate of taxation of interest is increased from 2% to 5%, zero taxation rate of dividends and royalties is abolished, as well as taxation of royalties at the rates of 5% and 10% is set.
The protocol also enhances the ability of the competent authorities of the states to exchange information.
In addition, the parliament ratified an agreement with Germany on financial cooperation, which will allow attracting a concessional loan from KfW up to EUR 214 million and grant financing up to EUR 38 million.
Ukraine’s Verkhovna Rada has ratified a protocol on Amendments to the Convention between the Government of Ukraine and the Republic of Turkey for avoidance of double taxation with respect to taxes on income and real estate.
An Interfax-Ukraine correspondent has reported that a total of 320 MPs backed bill No. 0005 on ratification of the amendments on Wednesday.
According to the conclusion of the foreign policy committee, the changes relate, in particular, to the procedure for taxation of income received by residents of the state, which is party in the treaty, from the disposal of shares or other rights; the procedure for taxation of remuneration received in connection with employment on a ship, aircraft, or other transport operated by an enterprise of the state, which is party in the treaty. The changes will also concern the exchange of information.
The Cabinet of Ministers has authorized Finance Minister Oksana Markarova to sign an agreement with the government of Oman to avoid double taxation and prevent tax evasion with respect to income and capital taxes.
The government made the relevant decision at a meeting on July 24 without discussion.
In addition, the government authorized Markarova to sign a protocol on amendments to the agreement on avoiding double taxation with the government of the United Arab Emirates.
Ukraine’s Verkhovna Rada has ratified a treaty between the governments of Ukraine and Qatar on avoidance of double taxation and prevention of income tax evasion.
The Finance Ministry of Ukraine reported on its website that the ratification of the treaty will help to accelerate the prevention of tax evasion, mutual reduction of tax obstacles for investment and trade.
The treaty introduces taxation of dividends at the rate of 10%, as well as 5% for dividends received by a company holding less than 10% of the capital of the dividend payers. The document sets taxation of royalties at the rate of 10% and 5% for other cases.
In addition, the treaty foresees the exchange of tax information without reservations about the requirements of national tax interest or bank secrecy, the Finance Ministry said.
The Government of Ukraine and the Swiss Federal Council have signed a protocol amending the bilateral convention on the avoidance of double taxation.
“The signing of this protocol creates favorable conditions for investors in Ukraine and Switzerland, stimulates business initiative of entrepreneurs, regulates issues of international taxation of income between states and eliminates tax discrimination,” President of Ukraine Petro Poroshenko, who attended the signing ceremony in Davos, wrote on his Facebook page on Thursday.
Poroshenko met with Swiss President Ueli Maurer and agreed to continue interaction between the competent authorities in the matter of returning assets illegally withdrawn from Ukraine by former officials, Ukraine’s presidential press-service reported.
During the meeting, Poroshenko invited his Swiss counterpart to visit Ukraine.
Ukrainian Finance Minister Oksana Markarova and Maurer signed the protocol.
According to a posting on the website of the Finance Ministry of Ukraine, the signing of the protocol is aimed at avoiding double taxation of individual and companies’ income earned on the territories of the two countries.
“This will be achieved both by dividing the right to tax certain types of income between countries depending on their place of origin, and by taking into account the amounts of taxes paid in one country in tax liabilities of a taxpayer in one country,” the Finance Ministry said.
According to the ministry, the signed protocol provides for an increase in the tax rates of interest and royalties from nil to 5%, improving the procedure for resolving tax disputes through arbitration, and expanding the parties’ ability to exchange tax information without mentioning the requirements of national tax interest or bank secrecy.
In addition, the document establishes rules of applying the right to receive benefits – they will not be provided regarding the type of income or property, if one of the main goals of any agreement or an agreement between economic entities was to directly or indirectly receive such a benefit.
“These rates and regulations suit the general practice of concluding such international treaties on the avoidance of double taxation and protocols thereto with other countries by Ukraine,” the Finance Ministry said.
After signing the protocol, the countries are to implement the internal procedures required for the ratification of the agreement, the ministry said.
