LETTER OF THE MAIN STATE TAX AUTHORITIES OF UKRAINE

of November 18, 1994 No. 14-210/09-1051

About the taxation of the income of nonresidents from placement of money on accounts

The main state tax authorities of Ukraine at the request of the Cabinet of Ministers of Ukraine of October 28, 1994 N 18201/48 considered the letter of the National export-import bank of Ukraine of 26.10.94 N 18/2892 about the taxation of the income of nonresidents from investment of funds on accounts in bank institutions of Russia and report.

As Ukreksimbank gains income in the territory of the Russian Federation from the sources located there the tax liabilities of Ukreksimbank concerning such income are determined according to the legislation of the country - places of income acquisition.

According to article 18 of the Law of Ukraine "About modification and amendments "About system of the taxation" of February 2, 1994 N 3904-XII income amount or arrived to the Law of the Ukrainian SSR, received by the companies, the organizations, their branches, departments abroad, joins in total of income (profits) which is subject to the taxation in Ukraine, and it is considered in case of determination of the amount of tax. At the same time the size of the credited amount cannot exceed tax amounts from the income which are subject to payment in Ukraine, as for income gained abroad.

Transfer above the specified amounts of taxes is performed on condition of the written confirmation of tax authority of the corresponding foreign state concerning the fact of the tax discharge and availability of international treaties on avoidance of double taxation of the income and prevention of tax avoidances.

As between Ukraine and the Russian Federation there is no agreement on elimination of double taxation of the income, to Ukreksimbank the taxes paid in the Russian Federation will not be enlisted.

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