Ukraine terminates double tax treaty with Iran over weapons supply to Russia
The Cabinet of Ministers has approved the draft law on the termination of the treaty with Iran on the avoidance of double taxation.
Source: This was reported by the Ministry of Finance press service
Details: The treaty has been in effect since 1996.
Quote: "The purpose of the draft law is to implement domestic procedures necessary to terminate the treaty, taking into account the need for an immediate and effective response to existing threats to the national interests and security of Ukraine in connection with Iran's supply of weapons to the Russian Federation.
Such actions of Iran cause Iran to be responsible for the consequences of the armed aggression of the Russian Federation against Ukraine, and destroy bilateral relations," the Ministry of Finance explained.
The consequences of the termination of the treaty are:
- prevention of contribution to the country's budget, which supports the aggressor, by establishing preferential tax conditions for residents of Iran who carry out activities in Ukraine. After the termination of the agreement, the general tax rate of 15%, established by the Tax Code of Ukraine, will be applied to all incomes of residents of Iran received from sources in Ukraine instead of the preferential rate established in the agreement: 10% for dividends, 10% for interest, and 10% on royalties;
- prevention of losses to the budget of Ukraine due to the crediting of tax paid in Iran by residents of Ukraine carrying out activities in Iran;
- the release of Ukraine from its obligations regarding the exchange of information with Iran on tax matters;
- accelerating the winding down of economic and financial ties with Iran.
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