Dividends payment by single tax payer to non-resident: is it in tax gripe?

20 June, 2017 Exclusive

Previously we have already considered the controversies over the application of treaties on avoidance of double taxation regarding the payments of dividends by single tax payers (in the review "Is it legitimate to apply the benefits under the treaties for elimination of double taxation to the payments from Ukraine made by entities exempt from income tax?"). However, taxation problems regarding the payment of dividends to non-residents by single tax payers are not limited to those issues.

Another important question is related to the advance payment from income tax on dividend payment. In fact, for a single tax payer, the advance installment on payment of dividends, if paid, is a sum which can be neither used nor refunded from the budget.

In this review we will dwell more on the second aspect, and also consider whether the exemption from withholding tax under the treaties vs. advance installment in case of dividend payment are mutually exclusive.

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