Ukraine Cyprus Double Taxation Treaty
Ukraine Cyprus Double Taxation Treaty is under review
It has been confirmed by Ukrainian officials that the double taxation treaty (DTT) between Ukraine and Cyprus has been under review, this followed talks on the 17th of December in Ukraine’s Parliament. Amongst the reasons given by Arseniy Yatseniuk Ukraine’s Prime Minister, was an accusation that pro-Russian oligarchs have been using Cyprus to set up Companies, in an attempt to reduce tax burdens and move capital in recent years. He gave a figure of $300 million per year being lost by the Ukrainian tax authorities, through tax free investments in Cyprus.
Original Double Taxation Treaty
According to Mr. Yatseniuk the original agreement that was signed back in 2012, was designed to act as a form of protection for the wealthy, as it included a 0% tax rate on the sale of property. In reference to the sales of properties, he was quoted as saying, “Since the property was sold via offshore companies, tax was paid neither in Ukraine, nor in Cyprus. That’s why the government addressed parliament to back the denunciation of this document.”
The effect on Cyprus
Mr. Christodoulos Angastiniotis, Chairman of the Cyprus Investment Promotion Agency (CIPA) in an interview with Gold News told his views on the matter. “This development appears to be the result of a political decision, which certainly does not reflect the strong relationship between the Cypriot and Ukrainian business communities,” in an attempt to play down any claims of misconduct Mr. Angastiniotis said “I must stress that there is nothing untoward in business dealings between Cyprus and Ukraine.” He believes Ukraine should have discussed with Cyprus any issues they may have had over the treaty, and Cyprus would have been open to negotiate. “Cyprus continues to implement international transparency standards and follow compliance regulations. For this reason, we do not welcome the recent decision by the Ukrainian government.”