UK, Ukraine tax treaty protocol signed, text available

The text is available of a protocol to the UK-Ukraine tax treaty, signed by representatives of both countries on October 9.

The protocol, which is not yet in force, would amend a double tax treaty signed by the two countries in 1993.

The treaty would set the maximum withholding tax rate on dividends at 5 percent if the beneficial owner is a company that holds 20 percent of the company paying the dividends. In other cases, withholding on dividends is a maximum of 15 percent.

Withholding tax on interest and rolyalteis is set at a maximum of 5 percent, except cases were the owner is a state, or other listed government authority, in which case withholding is set at zero.

Following OECD/G20 base erosion profit shifting (BEPS) plan agreements, the treaty includes principal purposes clauses to prevent treaty shopping. It also includes modern mutual agreement procedure and information exchange provisions and a new definition of “residence.”

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