Cooperation between United Mexican States and Ukraine in Tax Sphere - Ukraine
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October 2, 2012 the President of Ukraine signed the Law "On ratification of the Convention between the Government of Ukraine and the Government of the United Mexican States, in avoidance of double taxation and prevention tax deviation concerning income taxes, and its Protocol." The Convention aims to regulate taxation issues, both in Mexico and in the Ukraine.
Let's review some types of taxes, which are regulated by the Convention.
1. Income from real property. If a resident of Ukraine receives income from the usage / selling of real estate which is in the territory of Mexico, the income may be taxed in Mexico and vice versa – resident of Mexico who receives income from real estate on the territory of Ukraine, can tax them on the territory of Ukraine.
2. Dividends. Resident of Mexico and / or resident of Ukraine can choose in which country (Mexico and Ukraine) to pay taxes of dividends by themselves. If a resident of Mexico receives dividends from the company in Ukraine and chooses Ukraine as taxation country, the tax from the dividends in Ukraine will be the following:
a) 5 percent of the total amount of the dividends if the beneficial owner of the dividends is a company (other than the Association), which holds directly at least 25 percent of the capital of the company is paying the dividends;
b) 15 percent of the total amount of the dividends in all other cases.
We would like to note that when company - resident of Ukraine transfers dividends to the resident of Mexico, in any case, must pay profits tax in Ukraine. Now, the profit tax in Ukraine is 21%, but from the January 1, 2013, this tax will fall to 19%.
3. Royalties. Royalties arising, for example, in Ukraine and paid to a resident of Mexico may taxed in Mexico as well as in Ukraine (on choice). However, if chosen to tax a royalty in Ukraine and if the real owner of a royalty is the resident of Mexico, the tax shouldn't exceed 10 percent of total amount of a royalty.
We'd like to draw your attention to the fact that attitude of Tax authorities in Ukraine is often ambiguous and contradictory in taxation issues.
Syutkin and Partners law firm provides legal support of business, as well as qualify advice and legal assistance concerning taxation in Ukraine.
Remember, the timely visit to a specialist will help you avoid the problems and litigation with the tax authorities of Ukraine in the future.
ABOUT THE AUTHOR: Kateryna Bovan
Kateryna Bovan is a lawyer at Syutkin and Partners law firm. She specializes in Corporate law, Commercial law, Contract law, Litigations, Construction and Real estate, Land Law, Civil Law, Family law and Inheritance law. Education: Taras Shevchenko National University of Kyiv.
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More information about Syutkin and Partners
Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.
1. Income from real property. If a resident of Ukraine receives income from the usage / selling of real estate which is in the territory of Mexico, the income may be taxed in Mexico and vice versa – resident of Mexico who receives income from real estate on the territory of Ukraine, can tax them on the territory of Ukraine.
2. Dividends. Resident of Mexico and / or resident of Ukraine can choose in which country (Mexico and Ukraine) to pay taxes of dividends by themselves. If a resident of Mexico receives dividends from the company in Ukraine and chooses Ukraine as taxation country, the tax from the dividends in Ukraine will be the following:
a) 5 percent of the total amount of the dividends if the beneficial owner of the dividends is a company (other than the Association), which holds directly at least 25 percent of the capital of the company is paying the dividends;
b) 15 percent of the total amount of the dividends in all other cases.
We would like to note that when company - resident of Ukraine transfers dividends to the resident of Mexico, in any case, must pay profits tax in Ukraine. Now, the profit tax in Ukraine is 21%, but from the January 1, 2013, this tax will fall to 19%.
3. Royalties. Royalties arising, for example, in Ukraine and paid to a resident of Mexico may taxed in Mexico as well as in Ukraine (on choice). However, if chosen to tax a royalty in Ukraine and if the real owner of a royalty is the resident of Mexico, the tax shouldn't exceed 10 percent of total amount of a royalty.
We'd like to draw your attention to the fact that attitude of Tax authorities in Ukraine is often ambiguous and contradictory in taxation issues.
Syutkin and Partners law firm provides legal support of business, as well as qualify advice and legal assistance concerning taxation in Ukraine.
Remember, the timely visit to a specialist will help you avoid the problems and litigation with the tax authorities of Ukraine in the future.
ABOUT THE AUTHOR: Kateryna Bovan
Kateryna Bovan is a lawyer at Syutkin and Partners law firm. She specializes in Corporate law, Commercial law, Contract law, Litigations, Construction and Real estate, Land Law, Civil Law, Family law and Inheritance law. Education: Taras Shevchenko National University of Kyiv.
Copyright Syutkin and Partners
More information about Syutkin and Partners
View all articles published by Syutkin and Partners
Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.
