The Ukrainian Parliament Ratified the Protocol Amending the Double Tax Treaty with Denmark
22/02/22
On 16 February 2022 Ukrainian Parliament ratified the Protocol amending the Double Tax Treaty (“DTT”) between Ukraine and Denmark (further – “Protocol”).
The Protocol will enter into force after Ukraine and Denmark complete ratification procedures. It is expected to happen soon this year, and in this case, the new withholding tax (further – “WHT”) rates for payments to the residents of Denmark starting from 1 January 2023 will be as follows:
The Protocol contains the so-called principal purpose test (“PPT”), 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. However, the PPT already applies between Ukraine and Denmark because the DTT was modified by the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (“MLI”).
The Protocol also 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.
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