On July 23, 2013, the President of Ukraine signed the Law ratifying the Convention between the Government of Ukraine and the Government of the Republic of Cyprus for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income (hereinafter - the "2012 Tax Treaty").

The 2012 Tax Treaty, having been ratified by the Government of Cyprus on March 22, 2013, was finally ratified by the Ukrainian Parliament on July 4, 2013. The final procedural step for the 2012 Tax Treaty to enter into force is the exchange of notifications between Ukraine and Cyprus, which has yet to take place.

Given that such exchange of notifications is expected to be accomplished by the end of 2013, the provisions of the 2012 Tax Treaty would apply starting from January 1, 2014.

The 2012 Tax Treaty would replace currently effective 1982 Convention between the Government of the Republic of Cyprus and the Government of the USSR for the Avoidance of Double Taxation of Income and Property (the “1982 Convention”).

Under the terms of the 2012 Tax Treaty, the 1982 Convention would terminate upon the exchange of notifications between Cyprus and Ukraine, while the provisions of the 2012 Tax Treaty would apply to taxes as of January 1 of the year following such exchange. Accordingly, there is a risk that no tax treaty protection would be available after the 1982 Convention terminates, but before the 2012 Tax Treaty becomes applicable.