On 23 July 2018, acting Minister of Finance of Ukraine Oksana Markarova signed the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (the “MLI”) on behalf of Ukraine. The signing of the MLI by Ukraine is undertook within the G20/OECD Inclusive Framework on BEPS, which Ukraine joined starting from 1 January 2017.
The MLI is a universal instrument called upon for the effective management and amendment of the bilateral double tax treaties in force among its parties. By signing the MLI Ukraine undertook to apply its provisions (subject to reservations) to all of its currently effective double tax treaties, modifying or supplementing their provisions where applicable. Such modifications include provisions with regard to preventing treaty-shopping arrangements, limitation of benefits under the treaties, etc.
Ukraine is the 83rd jurisdiction to sign the MLI. Once Ukraine ratifies the MLI, its provisions will become effective and will supersede the respective double tax treaties in force between Ukraine and those jurisdictions that sign and ratify the MLI by then. Currently, the MLI has been ratified by nine jurisdictions, including Austria, Poland, Serbia, Slovenia, Sweden and the United Kingdom.