Ukraine's Cabinet of Ministers has again proposed to the Verkhovna Rada to ratify amendments to the convention with Cyprus on avoiding double taxation and preventing tax evasion.

The draft resolution was approved at a government meeting on Wednesday.

Presenting the document, Finance Minister Oleksandr Danyliuk said that it is proposed to increase tax rates from 2% to 5%.

He said that the requirement for taxation of income from the sale of immovable property is changed: relevant taxation in Ukraine is introduced, not at the place where investors are located (Cyprus).

The minister also said that the agreement envisages a compromise in dividend taxation.

"The decreased rate applied to 99% of all payments – the conditions to apply it have become tougher," he said.

He said that dividends can be taxed at 5% if the real owner of dividends is a company that directly holds at least 20% of the share capital of the company that pays dividends and that invested at least EUR 100,000 in the purchase of shares. Dividends are taxed at 10% in the rest of cases (earlier 15%).