Baltic States – CIS, Estonia, Financial Services, Latvia, Legislation, Markets and Companies, Ukraine

International Internet Magazine. Baltic States news & analytics Thursday, 28.03.2024, 18:43

Ukraine communicating with Estonian, Latvian representatives on ministerial level

BC, Tallinn/Riga, 22.01.2018.Print version
Ukraine's Finance Minister Alexander Danilyuk said that Ukrainian representatives will communicate with corresponding representatives of Estonia and Latvia on the level of ministers and envoys in relation to a decision of the Ukrainian government to add Estonia and Latvia to its list of tax havens, informs LETA/BNS.

"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.

 






Search site