The Ukraine State Tax Service (STS) recently issued guidance clarifying the tax consequences of a reduction in share capital. The guidance clarifies that with effect from 1 January 2021, a reduction in share capital, which accordingly leads to a decrease in retained earnings, is considered a deemed (constructive) dividend for tax purposes. In particular, the following are considered a deemed dividend in the amount that leads to a decrease in the undistributed profit of a legal entity:
- Payme…