On May 19, 2026, in Paris, Ukraine’s Minister of Finance, Serhii Marchenko, and the Vice Chancellor and Federal Minister of Finance of the Federal Republic of Germany, Lars Klingbeil, signed the Agreement between Ukraine and the Federal Republic of Germany on the Avoidance of Double Taxation with respect to Taxes on Income and the Prevention of Tax Evasion and Avoidance.
On behalf of the German side, the document was also signed by the Chargé d’Affaires ad interim of the German Embassy in Paris, Ms. Gudrun Lingner.
The new Agreement will become an important step in updating the legal and treaty framework between Ukraine and Germany in line with modern international taxation standards and will contribute to the development of bilateral economic and investment cooperation.
The document establishes clear rules for allocating taxation rights over income between the two states, aims to eliminate double taxation, prevent tax evasion, and create stable conditions for doing business.
“The signing of the new Agreement with Germany is an important step toward deepening economic cooperation between our countries. The document creates more transparent, fair, and predictable tax conditions for businesses and investors, while also strengthening the ability of both countries to counter tax abuse. At the same time, the updated approaches to the taxation of passive income correspond to Ukraine’s national economic interests and modern international standards,” said Ukraine’s Minister of Finance, Serhii Marchenko.
Once it enters into force, the new Agreement will replace the current Ukrainian-German Agreement on the Avoidance of Double Taxation signed on July 3, 1995.
Key changes provided for by the new Agreement
The Agreement updates taxation approaches in accordance with OECD standards and provides for changes in tax rates on passive income in the source state.
Taxation of dividends:
- The 5% rate is retained for dividends received by a company of one contracting state that owns at least 20% of the capital of a company in the other state;
- The rate is increased from 10% to 15% in other cases of dividend payments.
Taxation of interest:
- The rate is increased from 2% to 5% for interest paid on credit sales and on loans provided by banks and financial institutions.
Taxation of royalties:
- The zero tax rate for certain types of royalties has been abolished;
- A general tax rate of 5% has been established.
The new document also contains provisions regarding:
- prevention of abuse of tax benefits;
- expansion of tax information exchange between the competent authorities of Ukraine and Germany;
- mechanisms for resolving disputes in order to protect taxpayers’ rights.
