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Without Latvia, Estonia, and Georgia: Ukraine has reduced the offshore list

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The Cabinet of Ministers of Ukraine excluded Latvia, Estonia, and Georgia, as well as Malta and Hungary from the list of states whose transactions with counterparties are subject to control under the law on transfer pricing.

"Our partners, our colleagues were a bit worried about this issue, I was talking with the prime minister of Estonia, and the president had bilateral meetings in Davos. We agreed that we are working at the level of the Ministry of Finance and we find the right decision. Now we have found such a solution," Prime Minister of Ukraine Volodymyr Groysman said at a government meeting.

Minister of Finance of Ukraine Oleksandr Danylyuk added that within two months these countries will be consulted, since at the moment there is still a possibility that capital from Ukraine will go to countries with a zero-tax rate. "If, as a result of these consultations, we as a state are not sure that our interests are protected, we can return to this issue," the minister said.

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He also explained the initial inclusion of Estonia and Latvia in the offshore list by requirements of the Ukrainian legislation. "This is due to the fact that in these two countries (in Estonia for several years already, and in Latvia since January 1 of this year) a mechanism has been introduced to tax profits on the withdrawn capital. It means that profit is not taxed until it is distributed as dividends," the minister stressed.

As EADaily reported earlier, at a meeting with his Ukrainian counterpart Volodymyr Groysman and Finance Minister Oleksandr Danylyuk in Davos, Prime Minister of Estonia Jüri Ratas said that Estonia should be immediately removed from the list of offshore companies. At the very beginning of the year, the Ukrainian government signed a decision to include twenty-two new countries in its list of offshore zones including Estonia and Latvia. The main disadvantage of being included in the list is that the goods, services, and works purchased are immediately taxed by 30% with income tax and turnover tax.

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