Ukraine advances tax treaty protocols with Denmark and Qatar

04 October 2021 - Publication

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The Ukraine government published a draft tax law ratifying the protocol to the 1996 tax treaty between Ukraine and Denmark on September 2. On the same day, government officials of Ukraine and Qatar signed a protocol to their 2018 tax treaty.

Ukraine-Denmark protocol

The protocol with Denmark clarifies the definition of the resident of the contracting party. In addition, it introduces new criteria for applying the reduced tax rate on dividends: the beneficial owner of the dividends shall be the company directly owning at least 25% of the capital of the company paying the dividends for at least 365 days including the day of payment. The maximum tax rate that can be applied to royalty payments at source will be 5%.

The protocol will come into force upon its ratification by both contracting states. The protocol was signed by the governments of the contracting parties on February 2.

Ukraine-Qatar protocol

According to the Ministry of Finance of Ukraine, the protocol to the tax treaty with Qatar, inter alia, introduces the principal purpose test into the tax treaty. In addition, the tax authorities of the two countries would be able to implement any mutual agreement reached between them without applying the time limits provided by national legislation. The tax authorities of one country would also be authorized to use the information obtained from the tax authorities of the other country provided the latter permits this.

Thus, the protocol updates the tax treaty between Ukraine and Qatar in accordance with the OECD model tax convention.

The full text of the protocol is not yet available. The protocol will come into force upon its ratification by both parties.