ARTICLE
27 March 2024

Ukraine's Tightened Reporting Rules For Controlled Foreign Companies: What You Need To Know

E
Eurofast

Contributor

Eurofast is a regional business advisory organisation employing local advisers in over 21 cities in South East Europe, Middle East & the Baltics. The Organisation is uniquely positioned as one stop shop for investors and companies looking for professional services.
Since 2022, Ukraine has implemented stringent reporting rules concerning Controlled Foreign Companies (CFCs). These regulations impact individuals who hold significant stakes in foreign companies.
Ukraine Tax
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Since 2022, Ukraine has implemented stringent reporting rules concerning Controlled Foreign Companies (CFCs). These regulations impact individuals who hold significant stakes in foreign companies. It's essential for affected parties to understand their obligations to comply with the reporting requirements.

Reporting Criteria

The reporting criteria stipulate that individuals are obligated to report if they directly or indirectly own a share in a foreign company exceeding 50%. Additionally, individuals must report if they own a share exceeding 10%, provided that together with other residents of Ukraine, they collectively own more than 50% of the company.

Reporting Procedure

Owners of foreign companies are mandated to submit a report on controlled foreign companies to the tax authorities alongside their income declaration for the year 2023. The deadline for submitting this report is May 1, 2024.

Required Documents

The report must include legalized and translated financial statements of the foreign company for the respective year. It is crucial to collect financial statements no later than two weeks before the submission deadline.

Preparation and Compliance

To meet the reporting obligations effectively, individuals planning to report on CFCs should start collecting the necessary documents and information well in advance. Adequate preparation is key to ensuring that all required information is accurately compiled and submitted within the specified deadline.

Consequences of Non-Compliance

Failure to comply with the reporting rules regarding CFCs can result in penalties and other legal consequences. Therefore, it is imperative for affected individuals to adhere to the regulations and fulfill their responsibilities as CFC owners.

To sum it up, by understanding the reporting rules, affected individuals can ensure compliance and avoid potential penalties. It is essential to adhere to the deadline for submission and ensure that all required documentation is accurately compiled and submitted to the tax authorities.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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