ARTICLE
27 July 2013

Ukraine – Cyprus Double Taxation Agreement Moves Closer To Ratification

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Elias Neocleous & Co LLC

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Elias Neocleous & Co LLC is the largest law firm in Cyprus and a leading firm in the South-East Mediterranean region, with a network of offices across Cyprus (Limassol, Nicosia, Paphos), Belgium (Brussels), Czech Republic (Prague), Romania (Budapest) and Ukraine (Kiev). A dynamic team of lawyers and legal experts deliver strategic legal solutions to clients operating in key industries across Europe, Asia, the Middle East, India, USA, South America, and China. The firm is renowned for its expertise and jurisdictional knowledge across a broad spectrum of practice areas, spanning all major transactional and market disciplines, while also managing the largest and most challenging cross-border assignments. It is a premier practice of choice for leading Cypriot banks and financial institutions, preeminent foreign commercial and development banks, multinational corporations, global technology firms, international law firms, private equity funds, credit agencies, and asset managers.
Following its approval on 4 July by Verkhovna Rada, the Ukrainian parliament, the law on ratification of the Convention between the Government of Ukraine and the Government of the Republic of Cyprus for the Avoidance of Double Taxation and Prevention of Fiscal Evasion with Respect to Taxes on Income and the Protocol was signed by the President of Ukraine on 23 July.
Cyprus Tax

Following its approval on 4 July by Verkhovna Rada, the Ukrainian parliament, the  law on ratification of the Convention between the Government of Ukraine and the Government of the Republic of Cyprus for the Avoidance of Double Taxation and Prevention of Fiscal Evasion with Respect to Taxes on Income and the Protocol was signed by the President of Ukraine on 23 July.
 
The explanatory memorandum to the law observes that, "As a result of the conclusion of the said Convention entrepreneurs of both countries will ensure that income derived from business activities in the territory of another country as well as from sources in that other country in the form of dividends, interest and royalties are not subject to double taxation. The Convention also ensures that entrepreneurs a State shall be taxable in another state under the same conditions as the proprietors of that other State. Moreover, the Convention aims to prevent tax evasion, thus creating additional conditions for deepening Ukrainian-Cypriot economic relations."

The double tax agreement will enter into force when written notices of ratification have been exchanged and will have effect from the following 1 January. Until then the double tax agreement between the USSR and Cyprus will apply.

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