During the annual IMF and World Bank meetings, representatives of the governments of Ukraine and Australia signed a Convention on the Elimination of Double Taxation regarding income taxes and the prevention of tax evasion and avoidance, the Ministry of Finance of Ukraine reported.
The document was signed by Ukraine’s Minister of Finance, Serhiy Marchenko, and the Head of the Australian Treasury, Jim Chalmers.
The convention establishes clear and fair rules to ensure that the income of residents of both countries is not taxed twice. For businesses and citizens, this means protection against double taxation, more transparent rules, and favorable conditions for trade and investment.
“Ukraine continues to work on strengthening the transparency and stability of its tax environment. The convention creates clear rules for Ukrainian and Australian companies operating in both countries’ markets. It reduces the tax burden, removes barriers to investment, and promotes the development of bilateral trade,” emphasized Marchenko.
The document specifies a mechanism for allocating taxation rights over certain types of income between the states. In particular, dividends will be taxed at a rate of 5% if the owning company holds at least 10% of the capital of the company paying them. Interest will be taxed at 5% for financial institutions and 10% in other cases. Royalties will be taxed at a rate of 10%.
Additionally, the convention includes provisions aligned with current OECD standards, including measures to prevent tax abuse, exchange of tax information, and resolution of disputes between the states.
