Parliament ratifies Protocol amending Agreement on avoidance of double taxation between Ukraine and Qatar

The Verkhovna Rada of Ukraine has ratified the Protocol amending the Agreement between the Government of Ukraine and the Government of the State of Qatar for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income.

The provisions of this Protocol are fully consistent with the Organisation for Economic Co-operation and Development’s Model Tax Convention on Income and on Capital.

In particular, the Protocol provides for:

• a new wording of the preamble to the Agreement to prevent the creation of opportunities for complete exemption from taxation or preferential taxation through the abuse of double taxation treaties;
• expanding the provisions of Article 25 “Mutual Agreement Procedure”, according to which any agreement reached by the competent authorities of the Contracting States within this procedure shall be implemented regardless of any time limitations provided for by national legislation;
• supplementing Article 26 “Exchange of Information” with a provision that provides for the expansion of the possibilities of the competent authorities of the Contracting States to use the information received, subject to obtaining the permission of the competent authority of the Contracting State;
• restatement of Article 28 “Limitation of Benefits”, which restricts the application of the preferential provisions of the Agreement if the main purpose is to obtain such benefits.

The Ministry of Finance of Ukraine and the State Tax Service of Ukraine are the entities responsible for implementing the Protocol.

These amendments will allow Ukraine to implement the OECD recommendations on actions to combat base erosion and profit shifting and will help improve mutual agreement procedures, expand the benefits of international information exchange and prevent abuse of the Agreement.