Ukraine and Japan signed the Convention for the Elimination of Double Taxation

Today, on February 19, 2024, Minister of Finance of Ukraine Sergii Marchenko signed the Convention between the Government of Ukraine and the Government of Japan for the Elimination of Double Taxation with respect to Taxes on Income and the Prevention of Tax Evasion and Avoidance and the Protocol thereto. The document was signed in Tokyo during the Japan-Ukraine Conference for Promotion of Economic Growth and Reconstruction (JUCPEGR), where the Minister of Finance of Ukraine is a member of the delegation of the Prime Minister of Ukraine Denys Shmyhal.

"The Convention provides new opportunities for our countries, contributes to the creation of beneficial conditions for investment and the strengthening of economic relations between Ukraine and Japan," said Minister of Finance Sergii Marchenko.

The Convention and the Protocol for the purpose of the avoidance of double taxation establishes rules for the distribution between Ukraine and Japan of the rights to tax certain types of income derived by residents of one Contracting State from sources in the other Contracting State. In particular, it limits the right of the source country to tax dividends (5% for dividends received by a company of a Contracting State that owns at least 25% of the capital of the company paying such dividends), interest (10% and 5% if the beneficial owner of the interest is a bank, an insurance company or a securities trader, or a recognised pension fund, or if interest is paid with respect to debt-claims arising as a part of the sale of equipment or goods or the provision of services on credit) and royalties (5%). In addition, the Convention defines the methods for the elimination of double taxation by the Contracting States, establishes arrangements for the exchange of tax information between the tax authorities of Ukraine and Japan and the mutual agreement procedure carried out by the competent authorities if a resident of one of the Contracting States believes that as a result of the actions of one or both of the Contracting States he is or will be subject to taxation that does not comply with the provisions of this Convention.

The Ministry of Finance of Ukraine and the State Tax Service of Ukraine are the subjects of implementation of the Convention and the Protocol.