Ukraine: Replacement of Corporate Income Tax with Tax on Distributed Profits

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Ukraine - Replacement of Corporate Income Tax with Tax on Distributed Profits
On 5 July 2018, draft law was submitted to the parliament, introducing tax on distributed profits (the "Estonian model"), which would replace the corporate income tax. The changes if adopted will apply from 1 January 2019 and are the following:

• legal entities carrying on business activities in Ukraine, are subject to tax on distributed profits;
  
  
• dividends distributed will be subject to tax at a rate of 15%, whereas interest and royalties will be taxed at a rate of 20%;
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• dividends to be paid from profits derived in 2018 that have been subject to corporate income tax will be exempt from the tax.

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