U-Tax Blog

The main conclusions drawn from the webinar:

- It is very desirable during 2021 to decide on the retention / liquidation of foreign legal entities that could potentially fall under the Ukrainian CFC rules. The Tax Code of Ukraine exempts the receipts obtained in the aftermath of the liquidation of such legal entities in 2021 from personal income tax.

- When structuring transactions on the sale of Ukrainian legal entities through foreign holding companies (the sale of shares in a foreign company that controls a Ukrainian company), it may now be necessary to pay a withholding tax in Ukraine.

- It should be taken into account that the tax difference of 30% is now applicable not only to buying goods (works, services) from non-residents belonging to the "blacklisted” jurisdictions” or “blacklisted” entity types, but also to selling goods (works, services) to such non-residents.

- The deviation of prices in controlled transactions (transfer pricing) from the “arm’s length” prices now triggers not only additional corporate income tax charges, but also additional withholding tax charges in connection with the qualification of such a deviation as constructive dividends.