On February 27, 2025, the Verkhovna Rada of Ukraine adopted amendments to the law on ratification of the Multilateral Convention MLI, aimed at combating tax evasion.
The Ministry of Finance reported this, Ukrinform reports.
It is noted that changes have been made to Article 1 of the Law of Ukraine “On Ratification of the Multilateral Convention to Implement Tax Treaty-Related Measures to Combat Base Erosion and Profit Shifting.”
In particular, the list of international treaties to which the convention applies has been updated.
Over the past five years, there have been some changes in the list of current tax agreements. In particular, agreements with Russia, Belarus, and Syria have ceased to be effective. Agreements with Qatar and Malaysia have entered into force, as well as protocols amending agreements with Austria, the Netherlands, Great Britain, Switzerland, Denmark, Singapore, Qatar, and the UAE.
The amendments introduced supplement the international treaties of Ukraine with a preamble, which states that the treaties should not apply to persons using their provisions to evade taxation. The amendments also imply a limitation on the possibility of applying benefits if the main purpose is to obtain them.
In addition, the document establishes a ban on dividing contracts into several parts in order to reduce the time period after which a specific type of activity is considered a permanent establishment.
The law also gives taxpayers the right to initiate a procedure for mutual settlement of tax disputes both in the country of their tax residence and in the state where they conduct business.
These innovations are part of a comprehensive set of measures aimed at improving mechanisms to combat tax evasion and bringing the Ukrainian tax system into line with international standards.
As reported, the Multilateral Convention MLI entered into force for Ukraine on December 1, 2019. Its objective is to ensure rapid, coordinated and consistent implementation of the principles of combating base erosion and profit shifting by simultaneously modifying a significant number of existing tax treaties.