By Leonid Karpov, Accomplice, AC Crowe, Ukraine
On 30 October, Ukraine’s Parliament ratified a protocol amending the tax treaty between the governments of Ukraine and Cyprus for the avoidance of double taxation. It’s anticipated that the protocol will take impact on 1 January 2020.
It’s anticipated that the tax treaty protocol will present that no withholding tax will come up if a Cypriot firm transfers shares of a Ukrainian company funding fund, which immediately or not directly owns actual property positioned on the territory of Ukraine if the true property constitutes lower than 50% of the corporate’s belongings.
Nor will such tax come up if the Ukrainian company funding fund has been arrange as a public joint inventory firm or its shares are quoted on a inventory change or the true property property owned by the Ukrainian company funding fund is leased, or if that property is in any other case used for enterprise actions.
Mutual fund certificates are usually not deemed to be shares. Article 13, clause 6, of the Ukraine-Cyprus tax treaty protocol regulates the disposal of such certificates. Positive factors acquired Cypriot firm from this disposal shall be taxable solely in Cyprus supplied that these positive factors are topic to tax in Cyprus.