The draft law was proposed at the end of the summer of 2019 and was immediately submitted to the committees. Among the key positions of the draft law, the following are proposed:
- The state will ensure transparent regulation of taxation of foreign companies and introduce a number of effective anti-offshore measures. Classical schemes for capital withdrawal (interest, royalties, investments abroad) will become direct objects of taxation, which automatically eliminates the erosion of the tax base and the withdrawal of funds from taxation in Ukraine.
- The draft law provides an effective response to abuse of the provisions of tax conventions, since the tax on withdrawn capital is not a tax on repatriation and, accordingly, is not the subject of tax conventions.
- Conditions are created to prevent the artificial avoidance of recognition of the status of a permanent establishment and the control of transfer pricing is being improved.
The members of the Committee decided to recommend that the Verkhovna Rada adopt this draft law on first reading, and also forward their decision to the Committee on Finance, Tax and Customs Policy.
It is also reported that the committee examined the future fate of the Law of Ukraine “On the tax sovereignty of Ukraine and offshore companies”, which, among other things, plans to introduce an offshore duty.
It is expected that in the near future the draft laws will be adopted and make significant changes not only in the tax system of the country, but also in the business structures of many successful entrepreneurs