Parliament Ratifies Protocol on Amendments to the Convention Between Ukraine and Austria on Avoidance of Double Taxation

On December 16, 2020, the Parliament of Ukraine ratified the Protocol on Amendments to the Convention between the Government of Ukraine and the Government of the Republic of Austria on Avoidance of Double Taxation and Prevention of Income and Property Tax Evasion.

This Protocol amends the Convention in order to bring its provisions in line with the OECD Model Tax Convention on Income and Capital Taxes and the latest OECD standards, as well as to increase the tax rates on passive income in the source country.

In particular, the protocol provides an increase in general tax rates on dividends from 10% to 15% and on interest from 2% to 5%. The royalty tax rates were also increased, from 0% to 5% for the use of any copyright in scientific works, patents, etc., and from 5% to 10% for the use of copyright in literary or artistic works.

In addition to the increase in rates, the Convention is to be supplemented by new articles on limiting the application of the Convention's preferential provisions if the main purpose is to obtain such benefits and with regards to enhancing the capacity of the relevant authorities of the Contracting States to exchange tax information.

These amendments and rates correspond to the general practice of concluding such agreements and protocols by Ukraine with other countries of the world (similar rates are contained in most of the conventions and protocols thereto concluded by our state).