The Ukrainian Parliament has amended the Corporate Income Tax
(CIT) Law regarding the taxation of dividends. These amendments are
favourable for taxpayers and are aimed at solving certain
long-standing problems that were faced, particularly, by Ukrainian
holding companies.
In particular, the amendments:
- abolish taxation of dividends at the level of Ukrainian holding
companies on dividends distributed by their controlled foreign
subsidiaries (except for subsidiaries in off-shore jurisdictions).
A foreign subsidiary qualifies as controlled if a Ukrainian holding
company holds directly or indirectly the major stake or controls
the majority of votes in the board or holds at least 20 per cent of
the shares in the charter capital of such subsidiary. To compare,
the previous version of the CIT Law provided that dividends
received by a Ukrainian holding company from non-resident
subsidiaries were taxable, whilst any dividends received from a
Ukrainian source were exempt.
