Germany / Ukraine · International tax development
German Bundestag approves new Ukraine tax treaty
On 5 November 2026, Germany’s Bundestag approved the government bill for a new income-tax treaty with Ukraine, advancing the agreement without bringing it into force.
- Official document:
- Germany–Ukraine income-tax agreement signed 19 May 2026; Bundestag bill 21/8245
- Development date:
- 2026-11-05
The agreement was signed on 19 May 2026 and is intended to replace the countries’ 1995 treaty. The Bundestag described the change as removing tax barriers to cross-border trade and investment and strengthening economic relations. The vote is a material German legislative milestone, but it does not establish that both countries have completed ratification or exchanged instruments.[1][2]
Payment limits in the signed text
For dividends, source-state tax is capped at 5% where the beneficial owner is a company that directly holds at least 20% of the payer throughout a 365-day period including the payment date. The general dividend ceiling is 15%. Interest and royalties are generally capped at 5%, subject to the treaty’s exemptions, connected-permanent-establishment rules and related-party limitations. The treaty also contains a principal-purpose test, so the numerical ceilings do not establish entitlement by themselves.[2]
No immediate withholding change
Article 29 requires ratification and exchange of the instruments of ratification. The agreement enters into force on the exchange date. It then applies to source-withheld amounts paid, and other taxes charged for periods beginning, on or after 1 January of the following calendar year. The 1995 treaty continues to apply until the new agreement becomes effective under that timetable.[2]
Prepare, but keep the current treaty in place
German and Ukrainian groups should map dividends, interest, royalties, permanent establishments and affected tax periods, while continuing to apply the operative treaty and domestic relief procedures. Treasury teams should not change automated withholding rates merely because the German parliamentary approval has been completed. Groups should also identify direct shareholdings, holding periods and beneficial-owner evidence before modelling the 5% dividend ceiling. Collective investment vehicles, property-focused vehicles and arrangements affected by anti-abuse provisions require separate analysis.[2]
No entry-into-force date or first operative tax period can yet be assigned from the sources reviewed. Reopen the analysis when both ratifications and the exchange of instruments are officially confirmed, and again when the competent authorities publish any revised relief-at-source or refund procedures.[1][2]
Official sources
- [1] Double taxation agreement with Ukraine approved
German Bundestag · Document date: 2026-11-05
Lines 130–136 and 199–208: Bundestag approval, bill identity, intended replacement of the 1995 treaty and adopted resolution.
- [2] Bundestag paper 21/8245 — Germany–Ukraine income-tax agreement and approval bill
German Bundestag · Document date: 2026-09-28
Bill pp1–7; treaty Articles 2, 10–12, 26 and 29; PDF pp8–28. Article 10 lines 935–975; Articles 11–12 lines 1045–1157; Article 29 lines 2223–2242.