Controlled foreign company (CFC) Reporting

Until the end of April - for physical persons-controllers.
Until the end of February - for legal entities-controllers.

The report on CFC is submitted in the year following the reporting year.
In particular, in 2024, a report on the CFC for 2023 and, in accordance with the transitional provisions, for 2022, is submitted.
However, in the case of the adoption of draft law No. 8137, the submission of reports will be postponed for one more year, that is, the report for 2024 will be able to be submitted not in 2025 but in 2025.

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Each CFC controller is obliged to submit a CFC report once a year.
This obligation does not depend on the status of the company, availability of profit, and other circumstances. If the controller has a CFC, the CFC report is submitted in any case.
The report is prepared by the controller based on the annual financial statements of CFC, based on which its adjusted profit is determined. The share of adjusted profit corresponding to the size of the controller's share will be the tax base.

The calculation is carried out by the controller independently and indicated in the report on CFC.

If the profit of the CFC is exempt from taxation, the controlling person is exempted from the obligation to calculate the adjusted profit (39-2.4.3 of the PKU). This means that if the controller has the right to be exempted from taxation of CFC profit in Ukraine, he is not obliged to calculate the adjusted profit, and in the CFC report, he must indicate the reason for such exemption.

The report is submitted by each controller separately and for each controlled foreign company separately. The report must be submitted through the Taxpayer's Electronic Cabinet in compliance with the requirements of the law regarding electronic document flow and a qualified electronic signature.

Reports on CFC are submitted together with the tax declaration on assets and income.

An abbreviated report is filed if the controller is unable to timely prepare the CFC's financial statements or calculate the adjusted profit. In particular, if the reporting period in the country of registration of the company does not coincide with the calendar year, then the period of preparation of financial statements is longer. The company's financial statements do not need to be attached to the abbreviated report.

In the case of submitting a shortened form, the full report must be submitted by the end of the calendar year.

The full report differs from the abbreviated one in the scope and content of the information provided.

• Name of CFC, address, organizational and legal form, tax registration number (if available), state registration number.
• The size of the share of the controlling person.
• The structure of ownership of a share in CFC.
• The amount of income from the sale of goods (works, services) of CFC, profit from operating activities and before taxation according to the data of financial statements.
• Calculation of adjusted profit.
• Information on the grounds for exemption from income taxation of CFC.
• Amounts of dividends, amounts of profit received by CFCs.
• List of CFC operations with non-residents.
• The number of CFC employees as of the end of the reporting (tax) year.
• Information about the amount of income of CFC received from the permanent representative office in Ukraine.

If you have any questions, Avitar will help:

• Analyze whether the rules of the CFC apply to you;
• Determine whether there are grounds for exempting the income of the CFC from taxation in Ukraine;
• Develop a work model that will help reduce the tax burden;
• Conduct an analysis of the financial statements of the CFC and determine the adjusted profit of the CFC subject to taxation in Ukraine;
• Deal with CFC reporting;
• Prepare a tax declaration on assets and income;
• Prepare a report and notice on CFC.