On 21 February 2007, the Ukrainian Government authorized the Ministry of Finance to conclude a new income tax treaty between Ukraine and Cyprus. Once signed and in force, the new treaty will replace the Cyprus-former USSR tax treaty of 29 October 1982 in bilateral relation between Ukraine and Cyprus.
Details of the draft tax treaty have become available. The rates of withholding tax are:
– 15% on dividends in general and 5% if the mother company holds directly at least 25% of capital of the daughter’s company;
– 10% on interest in general; and
– 10% on royalties in general.