The Protocol is based on the OECD Model Tax Convention and is aimed at further development of trade and economic relations between Cyprus and Ukraine.

The key novelties are as follows:

  • 5% tax on dividends will apply if the beneficial owner of the dividends is a company holding at least 20% of the capital of the company paying the dividends and that has invested at least € 100,000 into the purchase of shares. Previously, the pre-requisite for applying of the reduced rate was either qualifying holding or investment.
  • Reduced tax of 2% on interest will increase to 5%.
  • With some exceptions, gains from disposal of shares in a company deriving at least 50% of their value from real estate located in the contracting state may be taxed in that state (exemptions include, for example, companies listed on approved stock exchange, public companies, real estate funds etc.). Previously, those gains were not subject to tax.

The Protocol between Cyprus and Ukraine shall enter into force upon completion of applicable diplomatic procedures.

For any further questions please contact Dmytro Ivanusa, Partner.