Government approves bill on ratification of Ukraine–Australia Double Taxation Convention

The Cabinet of Ministers of Ukraine has approved a bill on ratification of the Convention between the Government of Ukraine and the Government of Australia for the elimination of double taxation with respect to taxes on income and the prevention of tax evasion and avoidance, together with its Protocol, signed on October 16, 2025, in Washington.

The bill will be submitted to the Verkhovna Rada of Ukraine again due to the formation of the new Government. Ratification is a necessary step for the Convention to enter into force.

Once ratified by Parliament and effective, the Convention will establish a legal framework to avoid double taxation of income in relations between Ukraine and Australia, define the allocation of taxing rights between the two states, and help prevent cases of double taxation of the same income. For Ukraine, this will also be an important step toward strengthening taxpayer protections, enhancing legal certainty for business, and developing tax cooperation with Australia.

The Convention sets out the allocation of taxing rights between Ukraine and Australia regarding income earned by residents of one state from sources in the other, as well as the rules for taxation. In particular, it establishes maximum withholding tax rates depending on the type of income, the status of the recipient, and fulfillment of certain conditions:

• Dividends — 5% (if the beneficial owner is a company holding at least 10% of the capital of the paying company) and 15% in other cases;

• Interest — 5% for financial institutions defined by the Convention and 10% in other cases;

• Royalties — 10%.

Application of these rates is conditional on the recipient being the beneficial owner of the income, a resident of a contracting state, and meeting other requirements of the Convention, including the absence of abuse and compliance with the Principal Purpose Test.

As a general rule, business profits of an enterprise of one state are taxable in the other state only if there is a permanent establishment, while employment income is generally taxable in the state where the work is actually performed.

The Convention provides mechanisms for eliminating double taxation, rules on exchange of tax information, assistance in tax collection, and mutual agreement procedures. These mechanisms will support proper application of tax rules, prevent tax evasion, and ensure effective resolution of issues arising under the Convention.

For businesses, the Convention’s entry into force will mean more predictable conditions for cross-border operations between Ukraine and Australia and clear rules for taxation of profits, dividends, interest, royalties, and other income. For individuals, it will provide additional safeguards against double taxation of income related to employment, studies, investments, entrepreneurship, pensions, or other economic ties with Australia. This is particularly relevant for Ukrainians who may face tax obligations in both countries simultaneously.

The Convention will foster tax cooperation between Ukraine and Australia, enhance legal certainty for taxpayers, and create more favorable conditions for economic cooperation between the two states.

It will enter into force after completion of domestic procedures in both Ukraine and Australia and the exchange of diplomatic notifications between the parties.