Ukraine updates the list of countries with which it has tax agreements

On June 6, 2025, the official publication Holos Ukrayiny released Law No. 4278-IX, under which Ukraine updates the list of international agreements on the avoidance of double taxation. As of June 7, the document entered into force, becoming the final step in a large-scale legislative initiative launched back in November 2024 by the President of Ukraine. At that time, Draft Law No. 0293 was submitted to the Verkhovna Rada, eventually adopted on February 27, 2025, and signed on June 4.

The law amends Article 1 of the Law of Ukraine “On the Ratification of the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting.” This decision marks an important step in the implementation of the international BEPS (Base Erosion and Profit Shifting) initiative, supported by the Organisation for Economic Co-operation and Development (OECD).

In this article, we will examine the specific changes introduced, how the updated list will impact tax planning, and why this step is strategically significant for Ukraine in the context of international cooperation and tax transparency.

Removed from the list: which countries lost tax benefits

As a result of the review of previous arrangements, the Convention on the Avoidance of Double Taxation no longer applies to a number of countries. The following partners were excluded from the list:

• russian federation
• Belarus
• Syria
• Cuba

The reasons for this step vary. In the case of Cuba, for example, the convention was never ratified on its territory – domestic procedures were not completed, so the agreement never formally came into effect. In contrast, the exclusion of russia, Belarus, and Syria has clear political and strategic grounds: these countries are considered incompatible with Ukraine’s new foreign policy course, and all systematic tax interaction with them has effectively been suspended.

Exclusion from international tax dialogue means:

• No reduced tax rates for residents receiving income from these jurisdictions;
• Inability to credit taxes paid in these countries when declaring foreign income in Ukraine;
• Increased control by the Ukrainian tax authorities in relations with residents of the specified countries due to the lack of information exchange.

This step is also aimed at minimizing the risks of abuse of international tax rules by countries that do not ensure transparency and do not comply with OECD standards.

New opportunities: countries with which Ukraine has strengthened tax cooperation

Despite the removal of certain countries from the list, Ukraine has instead intensified cooperation with states that meet modern tax transparency standards. In 2025, new or updated double taxation avoidance agreements entered into force with the following jurisdictions:

• Austria
• Denmark
• Netherlands
• United Kingdom
• Switzerland
• Singapore
• United Arab Emirates
• Qatar
• Malaysia (new agreement)

Unlike older agreements, the new arrangements incorporate the provisions of the Multilateral Instrument (MLI) – a tool that allows the simultaneous update of multiple treaties in accordance with BEPS principles. The agreements include:

• Clear definition of the beneficial owner of income,
• Tax information exchange not only upon request but also automatically,
• Dispute resolution mechanisms between states,
• Anti-abuse provisions that prevent artificial profit shifting to low-tax jurisdictions.

For Ukrainian businesses, this opens up more opportunities for tax optimization while remaining within the law, and also reduces the risk of double taxation when working with international partners.

Current list of countries with which double taxation avoidance agreements are in effect

Following the legislative update, Ukraine now has valid double taxation avoidance agreements with 72 countries worldwide. These agreements form the legal basis for avoiding double taxation of income earned abroad by Ukrainian residents and income earned in Ukraine by foreigners. They provide mechanisms for tax crediting (for taxes paid in another country) and allow for preferential tax rates on certain types of income (such as dividends, interest, royalties, etc.).

These international agreements are bilateral and generally follow a common structure aligned with the OECD Model Convention. At the same time, many of them have already been adapted or supplemented with MLI provisions under the global BEPS initiative.

As of July 2025, agreements are in force between Ukraine and the following countries:

European region:

• Austria
• Azerbaijan
• Albania
• Belgium
• Bosnia and Herzegovina
• Bulgaria
• United Kingdom
• Armenia
• Greece
• Georgia
• Denmark
• Estonia
• Ireland
• Iceland
• Spain
• Italy
• Cyprus
• Latvia
• Lithuania
• Luxembourg
• Malta
• Moldova
• Netherlands
• Germany
• Norway
• Poland
• Portugal
• North Macedonia
• Romania
• Serbia
• Slovakia
• Slovenia
• Turkey
• Hungary
• Finland
• France
• Croatia
• Czech Republic
• Switzerland
• Sweden

Asia, Middle East, and Oceania:

• India
• Indonesia
• Iran
• Israel
• Jordan
• Chin
• Korea (South)
• Kuwait
• Laos
• Lebanon
• Malaysia
• UAE
• Pakistan
• Qatar
• Saudi Arabia
• Singapore
• Thailand
• Uzbekistan
• Vietnam

North and South America:

• Canada
• Mexico
• USA
• Brazil
• Venezuela

Africa:

• Egypt
• Libya
• Morocco
• South Africa
• Tunisia

Recommendations for businesses in the context of the updated list of tax treaties

The update of the list of international tax treaties not only reflects a shift in Ukraine’s approach to fiscal cooperation, but also requires businesses and individuals to adopt a more careful approach to tax planning and international operations.

What taxpayers should consider:

1. Verify the relevance of treaties when signing contracts

Before entering into a foreign economic agreement, especially when using structures in third countries, check whether a double taxation avoidance agreement is in force with that country. This is important to lawfully apply tax benefits and avoid double taxation.

2. Analyze the structure of international payments

Transactions with countries excluded from the list may result in full taxation with no right to foreign tax credit. This applies, in particular, to payments of dividends, royalties, and interest.

3. Prepare documentary proof of benefits

Tax residency of the counterparty, beneficial ownership of income, and the economic substance of the agreement — all of this must be properly documented. Without the necessary documents, Ukrainian tax authorities may deny the application of tax benefits.

4. Monitor updates to BEPS-related provisions

If a partner country implements new rules in line with BEPS, businesses must adapt their structure to avoid the risk of expense disallowance or denial of treaty benefits.

Other important aspects businesses should keep in mind:

– Lack of a treaty is not a prohibition on cooperation, but it increases the tax burden.

Transactions with countries that do not have treaties in force are not prohibited; however, the ability to apply reduced rates or eliminate double taxation is lost. As a result, a business may face the need to pay tax twice.

–  Risk of tax audit

Tax authorities tend to scrutinize transactions with jurisdictions that are not party to international agreements. Such transactions may require additional justification of their economic rationale.

– Need for regular audits of international structures

Companies should periodically conduct a tax audit of their international structure – especially in light of legislative changes, including the impact of MLI, BEPS, and FATCA/CRS.

The update of the list of countries with which tax treaties are in force is not just a technical change – it is a strategic step towards a transparent, predictable, and responsible tax policy.

Ukrainian businesses, especially those operating internationally, should take these changes into account in their operational and financial models. This will help not only avoid unnecessary tax losses, but also enhance the company’s tax security in the long term. If you have any questions, please seek tax advice.