A new DTT between Cyprus and Ukraine has been signed on the 8th of November 2012 by representatives of the two countries during an official visit of the President of Ukraine Mr Viktor Yanukovych in Cyprus. This treaty is to replace the old treaty with the USSR and it will enter into effect on 1 January following the year in which the parties exchange notifications of ratification.
The most significant provisions of the treaty are highlighted below:
• The withholding tax rate on dividends is 5% if the beneficial owner holds at least 20% of the capital of the dividend paying company or has invested in the acquisition of shares or other rights of the dividend paying company of at least €100,000. In all other cases the withholding tax rate is 15%.
• The withholding tax rate on interest is 2%.
• The withholding tax rate on royalties in respect of any copyright of scientific work, any patent, trade mark, secret formula, process or information concerning industrial, commercial or scientific experience is 5%, and 10% in all other cases.
• Taxing rights with respect to capital gains arising from a disposal of shares (irrespective of the underlying assets of the company in which the shares are being disposed of) or any other movable property is granted to the State in which the person making the disposal is tax resident.
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