20 Feb 2024 14:11

Ukraine, Japan sign agreement on avoidance of double taxation

MOSCOW. Feb 20 (Interfax) - Ukraine and Japan signed a Convention on the avoidance of double taxation and prevention of tax avoidance during the Japanese-Ukrainian Conference for Promotion of Economic Growth and Reconstruction in Tokyo on Monday, Ukrainian media reported, quoting the Ukrainian Finance Ministry.

"The agreement provides new opportunities for our countries, contributes to the creation of beneficial conditions for investment and the strengthening of economic relations between Ukraine and Japan," Finance Minister Sergei Marchenko was quoted as saying.

The Convention with Protocol limits the right of the source country to tax dividends - 5% for dividends received by a company of a Contracting State that owns at least 25% of the capital of the company paying such dividends; and interest - 10% and 5% if the beneficial owner of the interest is a bank, an insurance company or a securities trader, or a recognized pension fund, or if interest is paid with respect to debt-claims arising as a part of the sale of equipment or goods or the provision of services on credit; and royalties - 5%.

In addition, the Convention defines the methods for the elimination of double taxation by the Contracting States, establishes arrangements for the exchange of tax information between the tax authorities of Ukraine and Japan and the mutual agreement procedure carried out by the competent authorities if a resident of one of the Contracting States believes that they are subject to taxation that does not comply with the provisions of this Convention.

Ukrainian media quoted the finance minister as saying on social media that the parties also agreed to start negotiations to update the agreement on the promotion and protection of investments.

"Our goal is to give investors reliable legal protection and guarantees," he said.