The Ukrainian minister of finance, Oleksandr Danylyuk, promised Prime Minister Jüri Ratas (Center) in Davos on Thursday that the issue of Estonia having been added to a Ukrainian tax haven watchlist will be resolved quickly.
According to Estonian ambassador in Kiev, Gert Antsu, the reason why Estonia was added to the watchlist is that Ukraine treats Estonia's principle of tax-free reinvested corporate gains as a 0-percent corporate income tax, while in actual legal fact corporate income tax is paid on dividends, and the system makes avoiding tax impossible.
Antsu added that the decision affects all those companies who export to Ukraine, 402 last year in total.
The main issue with being on the list is that any revenue gained by selling goods, services, or work is immediately taxed at 30 percent income and value-added tax, and also brings with it stricter checks for businesses and banks.
Ratas told ERR's radio news on Thursday that the current situation is "unacceptable" and that Ukraine's decision is negatively affecting the competitiveness of Estonian companies.
The prime minister is currently attending the World Economic Forum in Davos, where he met with Ukraine's minister of finance, Oleksandr Danylyuk. "I told the Ukrainian prime minister as well as the finance minister that this situation needs to be resolved immediately. They both promised to deal with the matter, and the finance minister also promised to find a solution," Ratas said.
According to Ratas, Danylyuk explained the step with the new tax system Ukraine is currently trying to introduce. "He conceded that this might have been rushed, and that placing countries on the list might not have been properly assessed in all cases. He promised to deal with the matter no later than Monday, when he returns to Ukraine from Davos," Ratas added.
Editor: Dario Cavegn