Baltic States – CIS, Estonia, Financial Services, Latvia, Legislation, Markets and Companies, Ukraine
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Thursday, 28.03.2024, 18:43
Ukraine communicating with Estonian, Latvian representatives on ministerial level
"We are
in conversation with Estonian and Latvian envoys. In those two countries -- in
Estonia for many years already and in Latvia from Jan. 1 -- there is a tax
system, where the income of companies is not taxed before its distribution as
dividend. We have legal requirements that are inconsistent with this,"
Danilyuk said when responding to a question in the parliament.
He said that the decision is linked with Ukraine's
plan to change the income tax system of companies from 2019, where the current
income tax would be abolished and a tax concerning the withdrawal of capital
from companies would be implemented.
"Work is ongoing with these countries on the
level of embassies and finance ministers," the Ukrainian minister said.
On Dec. 27 last year the Ukrainian government adopted
a decision whereby 22 more countries, including Estonia and Latvia, were added
to the list of jurisdictions considered by Ukraine to be tax havens.
The downside to being on that list is that income tax
and VAT of 30% is slapped immediately on the goods, services and work bought
from such jurisdictions. Also supervision over businesses and banks becomes
tougher.
The Estonian ambassador to Ukraine, Gert Antsu, said that the reason for listing Estonia as a tax haven is that Ukraine
views the tax exemption granted by Estonia to reinvested profit as 0% corporate
income tax. In Estonia profits are taxed when dividends are taken out, and the
system does not allow to evade taxes. "Therefore we find that we have
ended up on that list by mistake," the ambassador said.
He said that the decision affects all Estonian
businesses which export to Ukraine. In 2016, such companies numbered 402.