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The growth of investment attractiveness of Ukraine

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The growth of investment attractiveness of Ukraine 29.12.2016 10:58

The interest of investors to Ukraine is constantly growing, caused by favorable market conditions, the availability of attractive investment sectors, special regime for foreign investments and positive changes in legislation.

Ukraine's accession to BEPS plan

The accession to the BEPS plan is an important step to increase the investment attractiveness of Ukraine. Ukraine will receive the official membership in the association on the 1 January 2017 in order to combat tax evasion.

BEPS (Base Erosion and Profit Shifting) is an association that implements plan to combat tax evasion developed by the Organization for Economic Cooperation and Development (OECD). Base Erosion and Profit Shifting or BEPS OECD includes planning in the tax area, which was established on the basis of inconsistencies and conflicts in the legal regulation of international taxation to artificially reduce profits that are taxed or withdrawal of profits to low-tax jurisdictions (offshore) to countries or territories that enable pay taxes at a reduced rate. It allows you to optimize the tax burden.

The Organization for Economic Cooperation and Development and the G20 countries together with the developing countries that participated in the development of BEPS package, constitute the current international tax structure, under which taxable profit is the economic activity and improved pricing system.

The implementation of the BEPS plan is to support all countries interested in the implementation and application of the rules on a consistent basis, in particular, those for which capacity building is an important issue.

Features of the BEPS plan

The BEPS plan is essential for developing countries with a strong dependence on income tax of commercial organizations, including transnational companies and small and medium businesses. The plan provides support in specific areas of activity of the states which joined the international tax program. It was developed 15 steps in the framework of BEPS plan, including the various spheres of combating aggressive tax planning, the most important are:

  • improvement transfer pricing rules;
  • prevention of tax evasion through international agreements;
  • taxation of income of controlled foreign companies;
  • information exchange.

More than 90 countries joined to implementation the plan BEPS, including Japan, Australia, Belgium, Canada, China, Finland, Mexico, United Kingdoms, United States of America, Italy.

Features of implementation of the BEPS plan

The BEPS plan for combating tax evasion relates directly to the state through fiscal and legislative bodies, commercial organizations that are payers of income tax. Ukraine's accession to the BEPS means that the state is in the process of implementation of the plan to combat tax evasion undertakes to introduce its minimum standard, which involves four steps:

  • fight against tax abuse related to the use of special tax regimes;
  • prevent abuse in the application of tax conventions;
  • disclosure of the use of aggressive tax planning schemes;
  • increase the effectiveness of mechanisms for resolving disputes concerning the application of agreements on avoidance of double taxation between countries.

The impact on the investment attractiveness of Ukraine

Ukraine's accession to the BEPS plan will enhance the transparency of the Ukrainian tax system as a positive step for the development of foreign investment. Consequently, stimulating the development of international trade will attract new investment flows.

Therefore, Ukraine's accession to the OECD BEPS plan for combating tax evasion is a positive step to improve the tax system, which promotes the growth of investment attractiveness. «APC» law company provides a wide range of services in taxation and transfer pricing, consults and represents interests of clients in resolving disputes.

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