On January 21, 2019 during the official visit of the President of Ukraine to Israel the Free Trade Agreement between Ukraine and Israel (hereinafter referred to as the “Agreement”) was signed.

The Agreement provides for creation of favorable conditions for the implementation of trade and economic cooperation between the countries, also being an effective tool for increasing the volume of Ukrainian exports to the Israeli market through the liberalization of access to goods and services, as well as improving the trade balance between Ukraine and Israel.

The Ukrainian Government is convinced that it is important for Ukraine that the Agreement will be in force in order to ensure the application of preferential rates of customs duty by Ukrainian businesses in the light of the Pan-Euro-Mediterranean Convention, the provisions of which Ukraine has already started to apply as of January 1, 2019.

The operation of the Agreement will not extend to the temporarily occupied territory of the Autonomous Republic of Crimea, the Sevastopol city and certain territories of Donetsk and Lugansk regions until the full restoration of the constitutional order in these territories.


On January 24, 2019, the Minister of Finance of Ukraine and the President of Switzerland signed the protocol (hereinafter referred to as the “Protocol“) amending the Double Tax Treaty (hereinafter referred to as the “DTT”) between the states.

The Protocol provides for the following changes:

>Reducing participation threshold in paying company for applying treaty benefits upon dividend payments – from 20% to 10%;

>Increase of withholding tax rates on interest and royalties – from 0% to 5%;

>Introducing the possibility of settling disputes through arbitration;

>Cancellation of reservations regarding national tax interests and banking secrecy that expands the possibilities for exchange of tax information;

>Prohibition of use of preferential rates in cases when the receipt of benefits was the main purpose of respective agreement.

In order for these amendments to enter into force, the Protocol should be subject to ratification by the Parliament of Ukraine and the Parliament of Switzerland.

It is worth noting that Protocols to the DTTs of Ukraine with Cyprus, the United Kingdom and the Netherlands has been not ratified yet.


The State Fiscal Service of Ukraine has issued an individual tax consultation, which explains one of the innovations in the Transfer Pricing (hereinafter referred to as the “TP”) rules, which began to operate starting from 2019. In particular, it was reported that according to the new version of the Tax Code of Ukraine, in order to determine the transaction as controlled it is necessary to analyze the entire chain of business transactions.

This means that in case of presence of “intermediaries” in the import`s or export`s transactions between the taxpayer and a non-resident, such an operation may be considered as controlled for TP purposes if the above-mentioned “intermediaries”:

>Do not perform essential functions related to the acquisition (sale) of goods (works, services);

>Do not use significant assets and / or do not bear significant risks during organization of the acquisition or sale of goods (works, services).


On February 28, 2019, the Parliament of Ukraine has adopted a law on ratification of Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS (hereinafter referred to as the “MLI Convention”).

Following the ratification of the MLI Convention, Ukraine is able to amend the existing Double Tax Treaties and to implement two actions of the BEPS Action Plan, namely:

>Action 6, ” Preventing the Granting of Treaty Benefits in Inappropriate Circumstances”, which includes the application of the Principle Purpose Test;

>Action 14, «Making Dispute Resolution Mechanisms More Effective».

The implementation of the MLI Convention also should:

>Reduce the transfer of domestic capital to low-tax jurisdictions in order to minimize tax liabilities;

>Reduce the risk of Ukraine falling into the EU “black list”.


On February 28, 2019, the Parliament of Ukraine has adopted a law on ratification of Double Tax Treaty between Ukraine and Qatar (hereinafter referred to as the “DTT”).

The DTT provides for the following withholding tax rates:

>Dividends – 5% if the beneficial owner of dividends is a company (other than partnership) which holds directly at least 10% of the capital of paying company; 10% in other cases.

>Interest – 5% in case of interest are paid in connection with the sale on credit of industrial, commercial and scientific equipment, as well as on any loan granted by a bank; 10% in other cases.

>Royalties – 5% in case of royalties are paid in respect of copyright of scientific works, patent, trademark, secret formula, process or information concerning industrial, commercial or scientific experience; 10% in other cases.