articles | 14 December 2015 | Stelios Americanos & Co LLC


On the 11 of December 2015, during the Cyprus’ President’s official visit to Ukraine, the new Protocol on the Double Tax Treaty between the two countries was signed between the representatives of the two governments.

The ratification of the Protocol by the two parliaments is necessary and once this is done. The changes to the treaty will become effective, as from the 1st of January of 2019. Until then the existing treaty applies in full.
The main provisions are:


The 5% withholding tax remains the same provided   both the following prerequisites are met:
1. The taxpayer must own at least 20% of the shares of the company paying the dividend and
2. Invest at least 100,000 Euro in the authorised share capital of the company.

In any other case the withholding tax is increased to 15%.

The difference of the above new provision with the existing treaty is that as at present it was sufficient to meet only one of the two prerequisite to be eligible for the 5% withholding tax.


The withholding tax rate is raised from 2% to 5%.

Capital gains

A provision was introduced whereby any profit deriving from the sale of shares will not be exempt from tax in the country where the property is situated if more than 50% of the shares value is derived directly or indirectly from that immovable property.

Most favourable Double Tax Treaty

There was a commitment from the Ukrainian government that Cyprus-Ukraine DTT shall not be less favorable than any other treaty entered by Ukraine.

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