The Ukraine Ministry of Finance announced on 29 December 2021 that the Cabinet of Ministers has approved a draft law amending the law for the ratification of the BEPS MLI. After the draft law is approved and enacted, Ukraine will need to submit a notification of the changes with the MLI Depositary. Details of the changes will be published once available.

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Government Approved Amendments to the Law on Ratification of the Multilateral Convention MLI

Today the Cabinet of Ministers has approved a draft law prepared by the Ministry of Finance amending the Law of Ukraine "On Ratification of the Multilateral Convention on the Implementation of Measures Concerning Tax Treaties to Prevent Base Dilution and Profit Shifting" (MLI Multilateral Convention).

The purpose of this Draft Law is to comply with Ukraine's obligations under the Multilateral Convention MLI in terms of updating the list of notifications and reservations of Ukraine in connection with the entry into force of several Protocols amending the international treaties of Ukraine on the avoidance of double taxation.

The changes were made:

• to the list of international treaties of Ukraine which are covered by the MLI Multilateral Convention;
• in the part of notifications on the addition of a preamble to the international treaties of Ukraine stating that the treaties shall not apply to persons who use its provisions for tax evasion;
• to the part of notifications on the presence of provisions in international treaties of Ukraine restricting the possibility of applying preferential provisions of the treaties if the main purpose is to obtain such benefits;
• in the part of notifications on the existence of provisions on prohibition to divide (split up) the contracts into several parts in the international treaties of Ukraine to decrease the period after completion of which the particular activity is deemed to be a permanent establishment;
• in the part of notifications on the establishment of possibility for the taxpayer to initiate the procedure of mutual agreement (tax dispute resolution) both in the state of his residence and in the state, where the activity of such person is performed.

Additional information

The Multilateral Convention (MLI - Multilateral Instrument) is a multilateral treaty developed by the Organization for Economic Cooperation and Development to combat tax base dilution and withdrawal of profits from taxation, ratified by the Parliament of Ukraine on February 28, 2019, and entered into force for Ukraine from December 1, 2019.