As of 01.01.22 The rules of taxation of profits of controlled foreign companies (hereinafter referred to as CFS), laid out in article 392 TCU, came into force.

The essence of CFS rules is to tax the adjusted profit of CFS at the level of controllers – residents of Ukraine.

The resident of Ukraine is recognized as a controlling person, in particular, but not exclusively if:

• The own directly or indirectly a share of more than 50% in a foreign legal entity;

or

• They have a share in a foreign entity of more than 10%, on condition that several individuals or legal entities who are residents of Ukraine have shares in this foreign entity, the size of which in aggregate is 50% and more;

or

• Independently or with other residents of Ukraine – related parties, they exercise actual control over the foreign company.

A controlling person is responsible for:

• Calculation of adjusted profit of CFS;
• Preparation and submission of CFS Report together with the financial annual non-consolidated CFS reports, as well as additional information about CFS upon request of STS;
• The report on CFS is submitted by results of the action of CFS during 2022 in 2023 (nuanced);
• Submission of a report on each change in the stake or start of exercise of the actual control over CFS.

 

Tax rate at the level of the controlling legal entity – 18% of the sum of the adjusted income of CFS, at the level of physical entity – 19,5 (nuanced). Additionally, a number of exceptions are provided by TCU, in which case CFS income is exempt from tax in Ukraine.

What you receive form Audit-Invest

• Determining CFS
• Preparation of the report on CFS
• Making a report on CFS
• Assisting CFS
• Consultations regarding potential exemption from tax
• Other consultations with the CFS

What kind of consultations can you have from Audit-Invest regarding the CFS?

• Goals of implementation of the rules of CFS
• Who it may concern
• What obligations are imposed on CFS?
• For what period and when to submit a report on CFS
• What volume of information is revealed in CFS
• If it is always necessary to submit the report on CFS
• How to calculate adjusted income for CFS
• Exemption of CFS from income tax. Is it feasible?

Preparation of the report on CFS

Request a brief