Ukraine and Denmark Signed the Protocol Amending the Double Tax Treaty

On 2 February 2021 the representatives  of Ukraine and Denmark signed the Protocol amending the Double Tax Treaty ("DTT") between two countries ("Protocol").

The Protocol will enter into force after Ukraine and Denmark complete ratification procedures. Should it happen this year, from 1 January 2022 the withholding tax ("WHT") rates for royalty payments made to Danish residents will change as follows:

The Protocol also introduces the so-called ‘principal purpose test’, which enables the tax authorities to deny treaty benefits (e.g. reduced WHT rates) if the main purpose of a transaction is to obtain such treaty benefits. Apart from that, the Protocol amends the list of taxes covered by the DTT and enhances the procedures for the mutual support in  tax collection and exchange of information between the Danish and Ukrainian tax authorities.

We will continue monitoring the developments in the international tax area and keep you updated.