Ukrainian Deputy Finance Minister Serhiy Marchenko and Turkish Economy Minister Nihat Zeybekci signed on October 9 a protocol introducing amendments to the intergovernmental agreement on avoiding double taxation, the press service of the Ukrainian Finance Ministry has reported.
"The signing of this protocol is aimed at avoiding double taxation of income of individuals and legal entities that arise in the territories of both countries. This will be achieved both by distributing the right of taxation of certain types of income between Ukraine and Turkey, depending on the place of their origin, and by accounting in tax obligations of the taxpayer of one state of the amounts of taxes paid in the territory of another state," reads a statement posted on the website of the Ukrainian government.
The ministry said that the signing of the protocol created favorable conditions for Ukrainian and Turkish investors, stimulated the business initiative of entrepreneurs and regulated the issue of international taxation of income in bilateral relations.
This will also help prevent tax evasion with the simultaneous reduction of pressure on law-abiding taxpayers, eliminate and tax discrimination. In addition, the protocol helps create mechanisms for improving cooperation between the tax authorities of Ukraine and Turkey by establishing procedures for mutual coordination of disputable issues and ensure the exchange of tax information.
The protocol envisages, inter alia, the extension of the term "resident" in accordance with the provisions of the OECD Model Tax Convention on Income and on Capital, as well as the new wording of the article on information exchange, which foresees a significant expansion of the opportunities of contractual states to exchange tax information as part of national tax interests or bank secrecy and a new article on assistance in collecting taxes.
To ratify this protocol, Ukraine and Turkey must implement internal procedures, the report says.
