Today, October 9, the Cabinet of Ministers of Ukraine adopted an order to submit for ratification by the Verkhovna Rada of Ukraine the Protocol Amending the Convention between the Government of Ukraine and the Government of the Republic of Austria on Avoidance of Double Taxation and Prevention of Income and Property Tax Evasion.

The said Protocol amends the Convention in order to bring its provisions into line with the OECD Model Convention and to increase the rates of taxation of passive income in the source country.

The protocol provides, in particular, for an increase in the general tax rate on dividends from 10% to 15% and interest from 2% to 5%. The royalties tax rates paid for the use of any copyright for scientific work, patent, etc. - from 0% to 5%, and for the use of copyright for literary works or works of art - from 5% to 10%.

In addition to the increase in rates, the Convention is to be supplemented by new articles on limiting the application of the Convention's preferential provisions if the main purpose is to obtain such benefits and with regards to enhancing the capacity of the competent authorities of the Contracting States to exchange tax information.

The application of the rules of an international agreement as part of the national legislation of Ukraine is possible only if the Verkhovna Rada of Ukraine gives its consent to the binding nature of such an agreement. Therefore, ratification of the Protocol is a necessary procedure for the completion of internal state procedures necessary for the entry into force of the Protocol and the application of the rules established by the mentioned document.