By 1 May 2026, tax residents of Ukraine must submit reports on CFCs

Regarding the determination of Ukrainian tax residency status.

Criteria for determining tax residency status (in accordance with subparagraph 14.1.213 of Article 14 of the Tax Code of Ukraine):

• place of residence in Ukraine;

• permanent place of residence in Ukraine;

• closer personal or economic ties (centre of vital interests) in Ukraine, including the permanent residence of family members, registration as a sole proprietor (FOP), employment, participation in and/or status as ultimate beneficial owner of a company, etc.;

• stay in Ukraine for not less than 183 days (including the days of arrival and departure);

• citizenship of Ukraine.

There are different approaches to determining residency status: either analysing all criteria cumulatively, or applying each criterion sequentially in descending order under the “if not, then the next one” rule.

In one of its recent clarifications, the tax authority stated that if an individual owns real estate, has opened bank accounts, receives income in Ukraine, has a registered place of residence, is registered as a sole proprietor under Ukrainian law, and is a citizen of Ukraine, such an individual may be recognised as a resident of Ukraine.

It was further noted that all tax residency criteria are analysed collectively, and each individual case is examined based on the documents and evidence provided, taking into account all relevant circumstances and grounds.

Regarding shares in CFCs and actual influence on CFCs

CFC reports are submitted by persons who:

own a share in a CFC >50%, or a share in a CFC >10% and, together with other residents of Ukraine, hold a total share of 50% or more;
are the ultimate beneficial owners of the CFC;
exercise actual control over the CFC (power of attorney or authority to conduct transactions with bank accounts, give instructions to management bodies, conclude agreements, etc.).

Is there any liability for failure to submit CFC reports?

Yes, liability is provided in the form of a fine (amounts are as of 2025):

failure to submit a report – UAH 302,800;
late submission of a report – up to UAH 151,400.

However, during the period of martial law (during the period of martial law and 6 months after), penalties are not applied.

Please note that the limitation period and tax audits for compliance with CFC rules is 2,555 days (7 years). During this period, CFC owners are required to keep documents (reports, copies of CFC financial statements, etc.).

Conclusions

The CFC report must be submitted by 1 May via the taxpayer’s electronic office at the same time as the annual declaration of assets and income for the previous year. Certified copies of the CFC’s financial statements must be attached to the report.

If the CFC’s financial statements have not been prepared by 1 May, an abridged form of the report shall be submitted, and the full report shall be submitted by 31 December. Copies of the reports shall be submitted together with the declaration for the following year.