Ukraine, Austria Increase DTA Withholding Tax Rates

Ukraine and Austria have agreed to sign a protocol to their double taxation agreement to increase withholding tax rates on dividends, interest, and royalty income.

The protocol increases the withholding tax rate for dividends and interest to 15 percent and five percent, respectively. Additionally, the royalty rate for patents, trademarks, industrial design, plans, models, product formulas, or processes has been capped at five percent. The royalty withholding tax rate for the rights to literary works and artworks, including cinema, has been increased to ten percent.

The Protocol also contains provisions relating to mutual assistance in tax collection in line with the OECD standards.

Ukrainian Finance Ministry noted: “The Ministry of Finance is actively working to close loopholes in the regulations which make tax evasion possible. This work includes adjusting current international agreements on avoidance of double taxation to international standards. Following the negotiations initiated by the Ukrainian side, the parties agreed to adjust the agreement [in line with] the OECD Model Tax Convention.”