Ratification of Protocol to the Cyprus – Ukraine Double Tax Treaty

On 30 October 2019, the Ukrainian parliament enacted and ratified the protocol signed on 11 December 2015 to the Cyprus – Ukraine Double Tax Treaty.  As the protocol was previously ratified by Cyprus, the amending protocol is now in force and shall apply as of 1st of January 2020.

Below is a summary of the main provisions of the protocol:


  • Withholding tax at 5% on gross dividends if the beneficial owner is a company (other than a partnership) which holds directly at least 20% of the capital of the company paying the dividends and has invested the equivalent of at least EUR 100,000 in the acquisition of the shares or other rights of the company;
  • Withholding tax at 10% on gross dividends will apply in all other cases (replacing the previous rate of 15%).


  • Withholding tax on gross interest of 5% will apply (replacing the previous rate of 2%).

Capital Gains

Capital Gains derived by a resident of a State from the alienation of shares deriving more than 50% of their value directly or indirectly from immovable property situated in the other State, may be taxed in that other State with certain exceptions. Any other disposal of shares is taxed in the State of the alienator provided that it is subject to tax in that State.

Most Favoured Nation clause

The protocol provides that if Ukraine implements a Treaty with another country and provides for an exemption from tax in Ukraine on dividends, interest or royalty payments arising in Ukraine, or to apply lower rates of tax in Ukraine to such payments than those provided by the respective Articles of the Tax Treaty with Cyprus, or to include more favorable provisions in Article 13 “Capital Gains”, then Cyprus and Ukraine have the right to renegotiate these Articles with a view to applying such exemption or lower rates to this Tax Treaty.

Contact Us

Feel free to contact us should you wish to discuss the above provisions and how these may affect your existing or contemplated structure.

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