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The agreement between Ukraine and Cyprus

Ukraine and Cyprus signed a convention for the avoidance of double taxation and prevention of tax evasion on income.

Thus, Ukraine abandon the 30-year practice of granting tax breaks to companies registered in the country. The new Convention will replace the agreement signed during the Soviet period, in 1982.

The new agreement will allow Ukraine to collect taxes from companies registered in Cyprus, according to the Ukrainian legislation. The entry into force of the convention is to increase revenues to the state budget of Ukraine and stop uncontrolled outflow of Ukrainian capital of Cyprus.

In particular, the Convention establishes the rate of taxation of dividends, interest, royalties, and disposal of property (as opposed to the current agreement today, which contains virtually zero rates).

Ukraine held talks with Cyprus to amend the agreement to avoid double taxation in 1997.

 


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