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On 16 January 2020, the Parliament of Ukraine finally passed the heatedly debated Law "On Amendments to the Tax Code of Ukraine Purposed to Improve the Administration of Taxes, Eliminate Technical and Logical Inconsistencies in the Tax Legislation" ("Anti-BEPS Law").

The Anti-BEPS Law shall come into force once it is signed into law by the President of Ukraine and officially published. In the meanwhile, on 17 January 2020, a group of parliamentarians moved with the initiative to rescind the results of the vote on the Anti-BEPS Law, blocking thereby the completion of the legislative procedure. Only after the said initiative is formally denied by voting - which is likely to happen during the upcoming plenary session of the Parliament in February - the Anti-BEPS Law would be unblocked for its signing and promulgation into law by the President of Ukraine.

The Anti-BEPS Law introduces a number of fundamental novelties aimed at combating tax base erosion and profit shifting practices, improving transparency, tax compliance and administration, formally instituting the substance-over-form principle and other important anti-avoidance rules, generally modernizing the tax framework of Ukraine in vein with the OECD-driven initiatives.

The new rules substantially alter the tax landscape for both Ukrainian individuals and legal entities as well as for non-residents that carry on business in Ukraine.

Please note that no final draft of the Anti-BEPS Law is available thus far. This Legal Alert is based on the draft text of the Anti-BEPS Law prepared for the second reading by the Tax and Customs Policy Committee of the Parliament. Accordingly, we may not rule out certain discrepancies between the second reading draft and the final text of the Anti-BEPS Law passed by the Parliament on 16 January 2020.

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