Cyprus – Ukraine Double Tax Treaty

The government of the Republic of Cyprus and the Government of Ukraine, desiring to conclude a Convention for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes of income

and confirming their endeavour to the development and deepening of mutual economic relations have signed  an agreement on 8^th of November 2012, effective as from 1^st January 2014, replacing the 1982 Convention for the avoidance of double taxation of income and property (the Cyprus – USSR Treaty).

On 11^th of December 2015, Cyprus and Ukraine signed a double taxation avoidance protocol in Kiev.  This protocol amends the current double tax avoidance convention and the prevention of fiscal evasion with respect to taxes on oncome and on capital.  The said protocol is expected to enter into force on 1^st of January 2019.

The signed protocol is based on OECD Model Tax Convention for the avoidance of double taxation on income and on capital and contributes to the further development of the trade and economic links between Cyprus and Ukraine.

According to the Cypriot minister of finance, ‘’a most favourable nation clause has been agreed for the taxes of interest, dividends, royalties and capital gains, ensuring that Cyprus is treated no less favourable than any other of Ukraine’s double taxation agreement counterparties in the future’’.

Taxes Covered

In case of Cyprus – ‘’Cyprus Tax’’

1. The income tax
2. The corporate income tax
3. Special contribution for the defence
4. The capital gains tax

In case of Ukraine – ‘’Ukrainian Tax’’

1. Tax on profits of enterprises
2. Income tax on individuals

Resident (Article 4)

Resident of a contracting state means any person who, under the laws of that state, is liable to tax therein by reason of his domicile, residence, place of management, place of registration or any other criterion of a similar nature. But this term does not include any person who is liable to tax in that state in respect only of income from sources in that state.

If an individual is a resident of both contradicting states then his status shall be determined by his permanent home or the centre of vital interests or the habitual abode or his national.

Where a person other than individual is a resident of both contradicting states, then it shall be deemed to be a resident of the contradicting state in which its place of effective management is situated.

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