[World Tax News] Ukraine Publishes Guidance on Residence Certificate Requirements for Tax Treaty Relief and More

World Tax News provides a weekly snippet of tax news from around the globe. Here is a glimpse of the tax happening in the world this week.

1. Ukraine publishes guidance on Residence Certificate Requirements for Tax Treaty relief

The State Tax Service of Ukraine recently issued guidance on the requirements for residence certificates when claiming a withholding tax exemption or reduction under a tax treaty. If income payments are made to a non-resident who is the beneficial owner of the income and a resident of a country with which Ukraine has a tax treaty, the tax agent (person paying the income) can apply a withholding tax exemption or reduction directly, provided the treaty conditions are met.

The non-resident has to submit a certificate confirming his residence in the relevant treaty country. These certificates, issued by the competent authority of the treaty country, must be legalised, translated, and notarized in accordance with Ukrainian law. If a non-resident does not provide a qualifying certificate, the income must be taxed under the Ukraine Tax Code.

There is no standardised form for issuing the certificate of non-resident’s tax status. However, each such certificate (certification, etc.) usually contains the following elements:

• Taxpayer’s name.
• Tax year for which certificate (certification, etc.) was issued.
• Issuance date of document.
• Signature of the authorized person who is authorized to issue a certificate (certification, etc.).
• Notification that the specified taxpayers are residents within the meaning of the relevant agreement on avoidance of double taxation.

The guidance also details the simplified procedures for legalising residence certificates under specific agreements. Lastly, regardless of any agreements that simplify certification requirements, a translated and notarised copy of the document is still required.

Source: Guidance dated 05 July 2024

2. Turkey submitted tax reforms to Parliament, including Global Minimum Tax implementation

On 16 July 2024, tax reform legislation was submitted to the Turkish parliament. The legislation includes provisions for implementing the Pillar 2 global minimum tax. This tax, aligned with the GloBE rules approved by the BEPS Inclusive Framework, will apply to fiscal years starting on or after 1 January 2024, with the first returns due in 2025.

The draft legislation also proposes a 10% minimum tax on domestic companies and an increased corporate tax rate of 30% for companies involved in public-private projects, such as infrastructure projects.

Source: Bill of Law on Amendments to Tax Laws and Certain Laws

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