On February 28, 2019 the Verkhovna Rada ratified Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (hereafter referred to as MLI) following its previous obligations, namely on July 23, 2018, in London, the acting Minister of Finance of Ukraine Oksana Markarova has signed this agreement which required Parliament’s ratification.
Before it, on January 1, 2017 Ukraine joined the Extended Cooperation Program of the OECD and thus committed itself to implement the minimum standard of the BEPS action plan.
Mandatory for Ukraine are 4 of 15 BEPS plan actions (minimum standard):
action 5: “Countering Harmful Tax Practices More Effectively, Taking into Account Transparency and Substance”;
action 6: “Preventing the Granting of Treaty Benefits in Inappropriate Circumstances”;
action 13: “Transfer Pricing Documentation and Country-by-Country Reporting”;
action 14: “Making Dispute Resolution Mechanisms More Effective”.
The MLI is action 15 of the BEPS action plan.
By having signed and ratified the MLI Convention, Ukraine complied with actions 6 and 14 of the BEPS action plan which are a part of the minimum standard and are mandatory for Ukraine. As its consequence Ukraine will make changes to 76 double taxation avoidance agreements to which it is a party.