On 18 September 2019, the Ukrainian Parliament ratified a protocol on amendments to the Convention on the Avoidance of Double Taxation between Ukraine and Switzerland (the "Protocol").
The Protocol was signed on 24 January 2019 and provides for, among other things:
- A decrease from a 10 to a 5 per cent tax rate for withholding tax on interest and royalties, the exemption for royalties on certain IP objects will no longer apply;
- Strengthening the capacity of tax authorities to exchange information without limitations for national tax interests or bank secrecy; and
- Introducing a Principal Purpose Test – tax benefits shall not be granted if the main purpose of the operation was the enjoyment of such benefits.
The amendments contemplated by the Protocol will become effective following the notification by each party to the other of the completion of the relevant internal state procedures for ratification of the Protocol by each state. We will continue to monitor the effectiveness of the Protocol and provide further information when available.
If you would like to know more about the subject covered in this publication, or our services, please contact Rob Shantz and Oleksandr Markov.
