On July 23, in London, the acting Minister of Finance of Ukraine Oksana Markarova has signed the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (hereafter referred to as MLI).
What’s it about?
The MLI Convention is an agreement enabling a participating country to make simultaneous amendments to all or selected conventions on the avoidance of double taxation.
The MLI was signed due to the fact that on January 1, 2017 Ukraine joined the Extended Cooperation Program of the OECD and thus committed itself to implement the minimum standard of the BEPS action plan.
Mandatory for Ukraine are 4 of 15 BEPS plan actions (minimum standard):
The MLI is action 15 of the BEPS action plan. By signing and ratifying the MLI Convention, Ukraine complies with actions 6 and 14 of the BEPS action plan which are a part of the minimum standard and are mandatory for Ukraine.
What’s the benefit?
«Implementation of the BEPS Actions will help to harmonize international tax rules between over 70 countries around the world and to create a more transparent tax environment. Having signed the MLI, we will be able to make necessary amendments to the existing international Double Taxation Treaties between Ukraine and other countries», the acting Minister of Finance of Ukraine Oksana Markarova said at the signing ceremony.
What comes next?
The Ukrainian Parliament shall ratify the MLI.
This Convention will make it possible to reduce the shifting of capital from Ukraine to tax havens aiming to minimize due taxes. This will contribute to the increase of the tax revenues in Ukraine.