The Government approves the draft of the agreement between Ukraine and Malaysia on the avoidance of double taxation

7/27/16

Today, the Government has approved the draft of the agreement with Malaysia on the avoidance of double taxation which was elaborated by the Ministry of Finance.

What are the benefits?

- intensified international trade and favorable conditions for investors;
- avoidance of double taxation;
- mutual reduction of tax barriers;
- prevention of tax evasion;
- removal of tax discrimination;
- exchange of tax data compatible with the latest standards of the OECD.

What next?

- the Agreement should be signed during the official visit of President of Ukraine Petro Poroshenko to Malaysia on August 3-5, 2016;
- the Ministry of Finance should elaborate similar agreements with Qatar and other countries as well as review the agreements on the avoidance of double taxation with Belgium and Great Britain by the end of 2016.

Additional information about the signing of the Agreement between the Government of Ukraine and the Government of Malaysia on the avoidance of double taxation and the prevention of income tax evasion and the Protocol to this Agreement:

- presently, there is no valid agreement on the avoidance of double taxation in place between Ukraine and Malaysia, taxation affairs are settled in accordance with the national tax legislation of both countries;
- the Agreement sets tax rates for dividends, interest and royalty which are fully in line with the OECD model tax convention and the common practice of Ukraine in concluding such agreements with other countries (the same tax rates are stipulated by most of the conventions signed by Ukraine):
tax rate for dividends – general rate of 15% and special rate of 5% on dividends to be received by a company which owns at least 20% of the capital of the company which pays the dividends;
tax rate for interest – general rate of 10% and general rate of 8% for royalty.
The implementation of the draft Agreement does not require any additional funding from the state budget.

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