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Ukraine: An overhaul of transfer pricing regulations is expected

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Vladimir Kotenko

Iryna Kalyta

The Ukrainian government is rumored to be on the verge of submitting a long-awaited draft transfer pricing law to the Parliament. Transfer pricing documentation requirement is supposed to be imposed, possibly covering 2013. In addition, the existing transfer pricing regulations are expected to undergo a major overhaul.

Ukrainian tax authorities question beneficial ownership status of non-resident royalty recipients

Ukrainian tax authorities started to actively question the beneficial ownership status of non-resident royalty recipients. IP sublicensing structures are under the biggest scrutiny. Several treaty shopping allegations have been known to be raised. No conclusive court practice has formed as yet.

Double tax treaty between the government of Ukraine and the government of Saudi Arabia came into force

A double tax treaty between Ukraine and Saudi Arabia started applying in 2013. The treaty provides the following key withholding tax rates:

  • Dividends: 5% / 15%

  • Income from debt-claims: 10%

  • Royalty: 10%

Tax exemption applies for dividends, interest and royalties received by the government.

Vladimir Kotenko (vladimir.kotenko@ua.ey.com) and Iryna Kalyta (iryna.kalyta@ua.ey.com)

Ernst & Young

Tel: +380 44 490 3000

Fax: +380 44 490 3030

Website: www.ey.com/ua

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