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Cyprus concludes a protocol with the government of Ukraine that will amend the Double Tax Treaty between the two countries as of 1st January 2019, under which Cyprus ensures a most favorable nation clause!

Cyprus Ministry of finance announced few days ago that on the 2nd of July 2015 negotiations took place, concluding a Protocol that will amend the Convention for the Avoidance of Double Taxation and the prevention of fiscal evasion with respect to taxes on income. According to the announcement, the agreed protocol when signed will come into effect not earlier than the 1st January 2019, date at which the existing Convention will expire. The existing Convention has been signed on the 8th of November 2012 and entered into force on the 1st of January 2014.

During the negotiations a most favorable nation clause has been agreed, for the taxes on interest, dividends, royalties and capital gains. This clause is considered of high importance as Cyprus will be treated equitably with other jurisdictions.

As noted, the text has been agreed between the two negotiating teams of the Contracting States and will contribute to the further development of the trade and economic links between Cyprus and the Government of Ukraine, as well as with other countries.

The announcement concludes by stating that, “Upgrading and expanding the network of Double Tax Conventions, is of high economic and political importance and aims to further strengthen and attract foreign investment in Cyprus as its standing an international business center is elevated”.

* A detailed analysis of the Protocol will be released in a forthcoming newsletter.