Submission of CFC Report - Law firm Finance Business Service: offshore registration, tax planning, legal services

As of January 1, 2022, new rules in Ukraine require individuals and legal entities who are residents and control foreign companies (CFCs) to submit relevant reports to tax authorities. Failure to comply with these requirements may result in significant penalties.

Who Must Submit CFC Reports?

Controlling persons are recognized as Ukrainian residents who:
– Directly or indirectly own a share in a foreign company that provides more than 50% of voting rights or profit distribution rights.
– Exercise actual control over a foreign company, regardless of formal share ownership.

Deadlines for Submission

The CFC report is submitted together with the annual tax declaration:
– For individuals: by May 1 of the year following the reporting year.
– For legal entities: by March 1 of the year following the reporting year.

Thus, the report for 2022 must be submitted by May 1, 2024, for individuals and by March 1, 2024, for legal entities.

Contents of the CFC Report

The report must include:
– General information about the CFC: name, registration details, ownership structure.
– Financial indicators: income, expenses, pre-tax profit.
– Calculation of adjusted profit: considering Ukrainian tax legislation.
– Information on dividends: received from Ukrainian legal entities.
– Employee data: number of staff at the end of the reporting year.
– Transactions with related parties: a list of transactions with non-residents, including those in offshore zones.

Procedure for Submitting the Report

The report is submitted electronically through the Electronic Taxpayer Cabinet. To do this:
1. Log into the system.
2. Select the appropriate CFC report form (form identifier F0108701 for individuals and J0108701 for legal entities).
3. Fill in all required fields, attach certified copies of the CFC’s financial statements.
4. Sign the report using a qualified electronic signature (QES).
5. Submit the report to the tax authority and ensure its acceptance.

Liability for Non-Submission

Late submission or non-submission of the CFC report entails penalties. The amount of the penalty depends on the duration of the delay and can reach significant amounts. In addition, additional inspections by tax authorities are possible.

How Can We Help?

The Finance Business Service team offers comprehensive services for the preparation and submission of CFC reports:
– Consultations: explaining legislative requirements, identifying obligations and risks.
– Report preparation: collecting and analyzing necessary information, completing reporting forms.
– Legal support: representing the client’s interests in tax authorities, assisting in dispute resolution.

By contacting us, you ensure compliance with all legal requirements and avoid potential penalties.

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