Ukraine has not signed OECD treaty on offshore companies

The Organization for Economic Co-operation and Development (OECD) has sent a letter to Ukrainian President Petro Poroshenko expressing concern over Kyiv’s delay in signing the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (BEPS), as reported on the Facebook page by former Deputy Minister of Finance Elena Makeyeva.

Makeyeva noted that Ukraine did not sign a comprehensive document on the implementation of BEPS on January 24 in Paris, refusing to participate in the official ceremony. At the same time, Kyiv is committed to complying with the minimum standard of the BEPS Action Plan in order to confirm its devotion to the fight against offshore companies.

The minimum standard includes, inter alia, mandatory review of existing conventions on avoidance of double taxation as well as improvement of the dispute settlement procedure.

According to Makeyeva, failure to implement the minimum standard by the end of 2018 could be a reason for the European Union to include Ukraine in its list of offshore countries.

At the end of last year, the Minister’s Cabinet approved a presidential decree authorizing Finance Minister Oleksandr Danyliuk to sign the Multilateral Convention on BEPS.

As a government source told Interfax-Ukraine, the president has not yet signed the decree, and Ukraine, accordingly, was unable to attend the document signing ceremony that took place on January 24 in Paris.

"As is known, your government has committed itself to the technical preparation of all the necessary multilateral agreements and was ready to sign [the Multilateral Convention] on January 24. However, I was informed that the documents that authorize your finance minister to sign the document on behalf of the government were not finalized on time to allow him to do so," noted a letter signed by OECD Secretary General Ángel Gurría.

  Ukraine, Organization for Economic Co-operation and Development, offshore companies