Ukraine's Cabinet of Ministers has authorized Ukrainian Minister of Foreign Affairs Pavlo Klimkin to sign an agreement on the avoidance of double taxation with Malaysia during Ukrainian President Petro Poroshenko's official visit to that country on August 3-5, 2016.
A corresponding resolution was adopted by the government at its meeting on Wednesday, Unian reports.
'The agreement foresees the avoidance of double taxation and the enhancement of financial controls,' Ukrainian Finance Minister Oleksandr Danyliuk said, when presenting the document to the government.
Ukraine's Finance Ministry, in turn, announced that on Wednesday, July 27, the government approved an agreement with Malaysia on the avoidance of double taxation, which was elaborated on by the Ministry of Finance.
The ministry noted that the document will boost international trade and create favorable conditions for investors by eliminating obstacles, such as double taxation. Mutual reduction of tax barriers, prevention of tax evasion, removal of tax discrimination and exchanges of tax data compatible with the latest standards of the OECD, are named as being among the advantages called for in the agreement.
Presently, there is no valid agreement on the avoidance of double taxation between Ukraine and Malaysia, as tax questions are settled in accordance with the tax legislation of both countries. The agreement however, sets tax rates for dividends, interest and royalties, which are in line with the OECD model tax convention and the common practice of Ukraine in concluding such agreements with other countries. The same tax rates are stipulated by most of the conventions signed by Ukraine, such as tax rates for dividends, with a general rate of 15% and special rate of 5% on dividends to be received by a company which owns at least 20% of the capital of the company which pays the dividends; tax rates for interest, a general rate of 10% and general rate of 8% on royalties.
'The implementation of the draft agreement does not require additional funding from the state budget,' the ministry wrote.
The Finance Ministry announced that it also should complete similar agreements with Qatar and other countries, as well as review the agreements on the avoidance of double taxation with Belgium and Great Britain by the end of 2016.