Ukraine's State Fiscal Service (SFS) recently published Guidance Letter № 6047 / 6 / 99-99-19-02-02-15, which clarifies the tax treatment of royalties paid to a non-resident. The guidance specifically addresses royalty payments made from Ukraine to a Russian resident through an agent.
According to the letter, a Ukrainian withholding tax agent may only apply the reduced withholding tax rate (10%) provided for under the 1996 Russia-Ukraine tax treaty if the non-resident recipient of the income…