The Parliament of Ukraine has ratified the Agreement between the Government of Ukraine and the Government of the State of Qatar on the Avoidance of Double Taxation and Prevention of Income Tax Evasion as well as the protocol to this Agreement.The reason for the signing of the Agreement and its protocol is that revenues resulting from economic relations between the residents of Ukraine and Qatar have been subject to double taxation including the country whose resident is the receiver of the revenues as well as in the country where these revenues are generated.
Hence, the ratification of the Agreement will help:
· Avoid double taxation;
· Prevent tax evasion;
· Remove mutual tax barriers for investments and trade.
The ratification of the Agreement is important for Ukraine, since the Ukrainian tax law stipulates that the avoidance of double taxation is only possible through the signing of bilateral international agreements.
The provisions of the Agreement and the protocol are in line with the OECD Tax Convention on Income and Capital and stipulate as follows:
· Tax on dividends – the standard rate is 10%; the 5%-rate is applied for dividends paid to the company owning at least 10% of the capital of the company paying these dividends;
· Tax on interest rate and royalty – the general rate is 10%; the 5%-rate is applied in other cases;
· Information exchange, significantly extended to enable the signing countries to exchange tax information without reservations related to the national tax interests or bank secret.
On March 20, 2018, in Doha, the Governments of Ukraine and the State of Qatar signed the Agreement on the Avoidance of Double Taxation and Prevention of Income Tax Evasion and the protocol to this Agreement.
The ratification of the Agreement is required to follow the domestic procedures so that the Agreement and the protocol to it enter into force in the relations between the two countries.