The rate of tax on interest has been increased from 2 percent to 5 percent, and taxation of dividends and royalties at a zero rate has been abolished, such major changes to the convention between Ukraine and the Netherlands on avoiding double taxation and preventing tax evasion with respect to tax on income and property have been stipulated in the relevant protocol.
This document was signed by Finance Minister of Ukraine Oleksandr Danyliuk and State Secretary for Finance of the Netherlands Menno Snel in the Netherlands on March 12.
“The next step is ratification of the protocol in the Verkhovna Rada of Ukraine,” Danyliuk wrote on his Facebook page.
According to a press release of the Ministry of Finance, the protocol provides for the taxation of dividends at a rate of 5 percent if the actual owner of the dividends is a company that directly owns at least 20 percent of the capital of the company, paying dividends, and 15 percent in all other cases.
The tax rate for royalties is set at 5 percent and 10 percent. Among the changes is also a significant expansion of the parties’ ability to exchange tax information.
