Convention between Finland and Ukraine for the avoidance of double taxation dated 14 October 1994 entered into force on 14 February 1998 (ratified by the Law of Ukraine # 370 dated 6 October 1995).
Article 10 (Dividends):
Paragraph 1. Dividends paid by a company which is a resident of a Contracting State to a resident of the other Contracting State may be taxed in that other State. Such dividends may also be taxed in the Contracting State of which the company paying the dividends is a resident and according to the laws of that State, but if the recipient is the beneficial owner of the dividends the tax so charged shall not exceed:
(a) 5% of the gross amount of the 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;
(b) 15% of the gross amount of the dividends in all other cases.
Paragraph 3. Notwithstanding the provisions of paragraph 1, dividends paid by a company being a resident of Ukraine to a company which is a resident of Finland and which is the beneficial owner of the dividends shall be exempt from Ukraine tax if:
(a) an investment guarantee is granted by the Finnish Guarantee Board for the capital invested in respect of which the dividends are paid or for dividends paid; or
(b) the capital invested (other than in the field of gambling, show business or intermediary business, or auctions) in respect of which the dividends are paid is not less than one million (1,000,000) United States dollars or its equivalent in Finnish markkas, and the recipient holds at least 50% of the equity capital of the company paying the dividends.
The exemption under this paragraph shall be allowed with regard to dividends paid for any tax year within the period for which the above-mentioned guarantee is in force or, where there is no such guarantee, with regard to dividends paid for the first three years next following the year during which the investment was made, or in any case for any longer period under the tax laws of Ukraine relating to the exemption of outward dividends, or to the exemption of profits of Ukrainian enterprises with foreign investment where the dividends are paid out of exempted profits.
Article 11 (Interest):
Paragraph 2. Interest may be taxed in the Contracting State in which it arises and according to the laws of that State, but if the recipient is the beneficial owner of the interest the tax so charged shall not exceed:
(a) 5% of the gross amount of the interest if:
(i) the recipient is a resident of that other State; and
(ii) such recipient is an enterprise of that other State and is the beneficial owner of the interest; and
(iii) the interest is paid with respect to indebtedness arising on the sale on credit, by that enterprise, of any merchandise or industrial, commercial or scientific equipment to an enterprise of the first-mentioned State,except where the sale or indebtedness is between related persons;
(b) 10% of the gross amount of the interest in all other cases.
Paragraph 3. Notwithstanding the provisions of paragraph 2:
(a) interest arising in Ukraine shall be taxable only in Finland if the interest is paid to:
(i) the State of Finland, or a local authority or a statutory body thereof;
(ii) the Bank of Finland;
(iii) the Finnish Fund for Industrial Co-operation Ltd (FINNFUND) or the Finnish Export Credit Ltd; or
(iv) any other institution, similar to those mentioned in subdivision
(iii), as may be agreed from time to time between the competent authorities of the Contracting States;
(b) interest arising in Finland shall be taxable only in Ukraine if the interest is paid to:
(i) the State of Ukraine, or a political subdivision or a local authority thereof;
(ii) the National Bank of Ukraine;
(iii) any institution which is established in Ukraine after the date of signature of this Convention and which is similar to any of those mentioned in subdivision (iii) of subparagraph (a), as may be agreed from time to time between the competent authorities of the Contracting States;
(c) interest arising in:
(i) a Contracting State on a loan guaranteed by any of the bodies mentioned or referred to in subparagraph (a) or subparagraph (b) and paid to a resident of the other Contracting State shall be taxable only in that other State;
(ii) interest arising in Ukraine on a loan guaranteed by the Finnish Guarantee Board and paid to a resident of Finland shall be taxable only in Finland.
Article 12 (Royalties):
Paragraph 1. Royalties arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.
Paragraph 2. Royalties, except in the case of payments referred to in subparagraph (a) of paragraph 3, may also be taxed in the Contracting State in which they arise and according to the laws of that State, but if the recipient is the beneficial owner of the royalties the tax so charged shall not exceed:
(a) 5% of the gross amount of the royalties, in the case of payments of the kind referred to in subparagraph (b) of paragraph 3;
(b) 10% of the gross amount of the royalties, in the case of payments of the kind referred to in subparagraph (c) of paragraph 3.
Paragraph 3. The term "royalties" as used in this Article means payments of any kind received as a consideration:
(a) for the use of, or the right to use, any computer software, patent, design or model, or plan;
(b) for the use of, or the right to use, any secret formula or process, or for information concerning industrial, commercial or scientific experience (know-how);
(c) for the use of, or the right to use, any copyright of literary, artistic or scientific work including cinematograph films, and films or tapes for television or radio broadcasting, or any trade mark.
