Ukraine and Germany have signed a new agreement on avoiding double taxation. The document was signed in Paris and will replace the 1995 treaty after ratification procedures are completed.
The agreement matters for companies, investors and Ukrainians living or working in Germany. It defines how taxing rights are divided between the two states and aims to prevent both double taxation and abusive use of tax benefits.
Key changes
The agreement keeps a 5 percent rate for dividends when a company owns at least 20 percent of the capital of a company in the other state. In other cases, the dividend rate rises to 15 percent. Interest taxation for credit sales and bank loans increases to 5 percent, while royalties receive a general 5 percent rate.
The text also expands information exchange between tax authorities and includes mechanisms for resolving disputes. This brings the bilateral framework closer to current OECD standards.
Why it matters now
The old treaty was signed three decades ago, before major changes in international tax practice. Since 2022, the practical importance has grown because many Ukrainians live, work, open accounts or run businesses in Germany.
Clearer rules do not remove the need for individual tax advice. Residency, center of vital interests and income source still matter. But the updated treaty gives both states and taxpayers a more modern basis for cross-border taxation.
