As reported
earlier, on November 8, 2012 Cyprus and Ukraine signed a new
double taxation agreement to replace the Cyprus – USSR
agreement of 1982, which Ukraine had adopted on independence. The
new agreement, which retains most of the beneficial features of its
predecessor and maintains Cyprus's status as among the most
favourable of Ukraine's treaty partners, will enter into force
when both states have exchanged notifications that the necessary
ratification procedures have been completed.
The draft law on ratification was registered with the Ukrainian
parliament on May 17, 2013 and when voting took place on the draft
law on June 18, the government failed to secure the requisite
majority for approval of ratification. The Ukrainian government
will now have to register a new draft law in order to ratify the
new double taxation agreement.
In the interim period the Cyprus – USSR agreement continues
in force. This provides even greater benefits (in the form of zero
rates of withholding tax) than the new agreement that will replace
it, so businesses should not be adversely affected by the
delay.
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