Harking back to the Vodafone India case, the State Tax Service of Ukraine has recently clarified that a non-resident purchaser must withhold tax on capital gains derived by a non-resident seller in the case of a sale of shares in a Ukrainian company.

Gains arising on the sale by the non-resident shareholder to the non-resident purchaser will be liable to WHT at 15% unless reduced pursuant to a relevant double tax treaty. In such circumstances, the purchaser must first register with the Ukrainian tax authorities before making any payment for the Ukrainian company shares. The tax withheld by the purchaser must be paid over to the State.

Originally published June 2021

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