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Controlled foreign companies

Controlled foreign companies

A CFC is any legal entity registered in a foreign state or territory, which is recognized as being under the control of an individual – a resident of Ukraine or a legal entity – a resident of Ukraine in accordance with the rules defined by this Code.

A foreign company is recognized as a controlled foreign company if an individual is a resident of Ukraine or a legal entity is a resident of Ukraine:

  • owns a share in a foreign legal entity in the amount of more than 50 percent, or
  • owns a share in a foreign legal entity in the amount of more than 10 percent, provided that several individuals – residents of Ukraine and / or legal entities – residents of Ukraine own shares in a foreign legal entity, the total amount of which is 50 percent or more, or
  • individually or together with other residents of Ukraine – related parties, exercises actual control over a foreign legal entity.

Valeriia Sluchynska, lawyer at Finance Business Service, prepared and conducted the seminar “CFC Reporting 2022”.

Main topics of the seminar:

  • CONTROLLED FOREIGN COMPANIES – NEW RULES 2022/2023
  • CFC reporting. Message about CFC
  • Determination of the taxable base. Exemption from taxation under CFC rules

Failure to submit a report on controlled foreign companies within 30 calendar days following the last day of the deadline for the payment of financial sanctions (fines) provided for in this paragraph shall result in the imposition of a fine in the amount of five subsistence minimums for an able-bodied person established by law as of January 1 of the tax (reporting) ) of a year, for each calendar day of failure to submit a report on controlled foreign companies, but not more than 300 subsistence minimums for an able-bodied person, established by law as of January 1 of the tax (reporting) year.

If you have any questions related to CFC, you can always contact Finance Business Service and get advice from qualified specialists!

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