The Double Taxation Relief and International Tax Enforcement (Ukraine) Order 2018

EXPLANATORY NOTE

(This note is not part of the Order)

The Schedule to the Order contains a Protocol (“the amending Protocol”) which amends a convention between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of Ukraine (“the Convention”). The Convention was scheduled to the Double Taxation Relief (Taxes on Income) (Ukraine) Order 1993 (S.I. 1993/1803). The Order brings the amending Protocol into effect.

The Convention aims to eliminate the double taxation of income and gains arising in one country and paid to residents of the other country. This is done by allocating the taxing rights that each country has under its domestic law over the same income and gains, and/or by providing relief from double taxation. There are also specific measures which combat discriminatory tax treatment and provide for assistance in international tax enforcement. The amending Protocol continues that approach.

The amending Protocol amends the preamble to the Convention and the Articles of the Convention relating to persons covered, taxes covered, general definitions, residence, dividends, interest, royalties, mutual agreement procedure and exchange of information. The Article of the Convention relating to limitation of relief is replaced by an Article on entitlement to benefits. The Article of the Convention relating to partnerships is deleted.

Article 1 provides for citation.

Article 2 makes a declaration as to the effect and content of the Arrangement.

The amending Protocol will enter into force on the date of the later of the notifications by each country of the completion of its legislative procedures.

The amending Protocol will take effect as follows:

(a) in respect of the amendments made to Article 26 (Mutual agreement procedure) and Article 27 (Exchange of information) of the Convention by Articles 11 and 12 of the amending Protocol, from the date of entry into force of the amending Protocol, without regard to the taxable period to which the matter relates,

(b) in respect of taxes withheld at source, for amounts paid or credited on or after the first day of January of the year next following the date on which the amending Protocol enters into force,

(c) in Ukraine, in respect of other taxes, for fiscal years beginning on or after the first day of January of the year next following the date on which the amending Protocol enters into force,

(d) in the United Kingdom:

(i) in respect of income tax and capital gains tax, for any year of assessment beginning on or after the sixth day of April next following the date on which the amending Protocol enters into force, and

(ii) in respect of corporation tax, for any financial year beginning on or after the first day of April next following the date on which the amending Protocol enters into force.

The date of entry into force will, in due course, be published in the London, Edinburgh and Belfast Gazettes.

A Tax Information and Impact Note has not been produced for the Order as it gives effect to a double tax agreement. Double taxation agreements impose no obligations on taxpayers, rather they seek to eliminate double taxation and fiscal evasion.