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Date of Termination of Convention between the Government of the Union of Soviet Socialist Republics and the Government of the Republic of Cyprus for the Avoidance of Double Taxation of Income and Property; Requirement on Sale of the Part of Revenue in Foreign Currency is Amended
KPMG, Kyiv, Ukraine, Friday, November 1, 2013
Date of Termination ofConvention between the Government of the Union of Soviet Socialist Republicsand the Government of the Republic of Cyprus for the Avoidance of DoubleTaxation of Income and Property
On 10 October 2013 the Ministryof Foreign Affairs of Ukraine (the “MFA”) released the letter “On Amendments tothe Text of International Treaty” No. 72/14-612/1-2711 (the “Letter”) whichinforms that Ukraine and Cyprus have reached an agreement with regard to thecorrection of a technical error in the Ukrainian text of a new Convention forthe Avoidance of Double Taxation dated 8 November 2012 (the “Convention”)
According to the Letter, on 10October 2013, part 2 of Article 26 of the Convention has been amended and setout as follows:
“2. The Convention between theGovernment of the Union of Soviet Socialist Republics and the Government of theRepublic of Cyprus for the avoidance of double taxation of income and propertysigned on 29.10.1982 shall be terminated on the date that this Convention comesinto effect”
Due to the introduced amendments,the discrepancies between the English and Ukrainian versions of the Conventionwere eliminated.
Thus, from the date when the Convention entered into force (7August 2013) till the date when its provisions shall become applicable (1January 2014), the provisions of the Convention between the Government of theUnion of Soviet Socialist Republics and the Government of the Republic ofCyprus for the Avoidance of Double Taxation of Income and Property dated 1982will apply.
Requirement on Sale of the Partof Revenue in Foreign Currency is Amended
On 12 October 2013 the Resolutionof the Board of the National Bank of Ukraine (the “NBU”) “On amendments to theResolution of the NBU dated 14 May 2013 No. 163” No. 381 (the “Resolution No.381”) has become effective.
As per Resolution No. 381,the temporary requirement on sale of 50% of revenues in foreign currency willapply not only to export revenues in foreign currency received by residentsfrom sales of goods (works/services) under cross-border agreements, but also toforeign-currency revenues of any kind received by companies (which are notconsidered an authorized bank) and individual entrepreneurs from overseas
