The new double taxation agreement between Ukraine and Cyprus
On the 5th of July the Ukrainian parliament ratified the new double taxation agreement between Ukraine and Cyprus, which was signed in Nicosia on 8 November 2012.
The most significant provisions of the new treaty are highlighted below:
Withholding Tax rates:
• 5% - if the beneficial owner holds at least 20% of the capital of the dividend paying company or has invested in the acquisition of shares or other rights of the dividend paying company of at least €100,000.
• 15% -In all other cases.
• 5% - in respect of royalties from copyrights of scientific work, patents,trademarks, secret formulae or processes or information concerning industrial,commercial or scientific experiences.
• 10% -in all other cases.
Under the provisions of its domestic legislation, Cyprus does not impose any withholding tax for dividends and interest as well as for royalties for use outside Cyprus.
Taxing rights with respect to capital gains arising from a disposal of shares (irrespective of the underlying assets of the company in which the shares are being disposed of) or any other movable property is granted to the State in which the person making the disposal is tax resident.