Signing of a tax treaty between Ukraine and Malta in the very near future

01.08.2013

The Ministry of Finance of Ukraine has jumped right into the thick of the double taxation agreement with Malta. On the website of the ministry was the information about the approval of the draft convention, as well as some tax rates that are expected to see in the final version.

It is supposed that the general tax rate will be 15%. In case when the company, which is paying the dividend, possesses at least 20% of the company’s capital, the tax rate will be 5%. Withholding tax on royalties and interest will be 10%.

It should be said that this agreement is not the first one. In the middle of April 2013 there was the double taxation agreement with Ireland, and in the late July the agreement with Cyprus.

Based on: http://minfin.gov.ua

Expert’s opinion

 An agreement on avoidance of double taxation is a good practice. Without these agreements, tax is withheld twice from the same income.

Before the denounce of the old contract between the Soviet Union and Cyprus, namely Cyprus was the best partner for entry of foreign capital into Ukraine.

After the Cyprus Spring 2013, the benefits of doing business with Cyprus disappeared.

Malta, in this respect, may offer the advantages of a wide network of double taxation agreements and low tax rates.

Yaroslav Lomakin ( Managing partner of “Honest&Bright” company)