CFC: 2024 reporting reminder

Barbashyn Law Team
7 February, 2024 5 min for reading
7 February, 2024 5 min for reading

There are still a few months left to submit CFC reports. Therefore, we decided to remind you what needs to be done and prepared a calendar of the main dates according to the CFC rules for individuals.

CFC: Do the rules apply to you?

First, we check if the CFC rules cover you.

📍The main criteria that indicate that the CFC rules apply to you:

  •  tax residency of Ukraine (that is, the individual – the owner of the CFC is a resident of Ukraine);
  •  a share in a CFC of one person >50%, or >25%, and the co-owners are residents of Ukraine, and together the shares are 50% or more;
  •  the status of the ultimate beneficial owner;
  •  actual control over the CFC (general power of attorney, authority to conduct transactions with bank accounts, conclude agreements on behalf of the CFC, etc.)

 

Tax obligations of CFC in Ukraine

If you meet the following criteria, you are a controlling person who has certain tax obligations in Ukraine:

🔹 within 60 days – to submit a notification on CFC (on registration of CFC, on purchase or sale of a share in CFC, on change of share size, etc.);

🔹 by 01.05.2024 – simultaneously with submitting the annual declaration of assets and income for 2023, submit a report on CFC (for the reporting year 2023, or immediately for two years 2022-2023, if not submitted in 2023); if the company was registered in 2024, the notification is submitted, and the report is submitted in the following year;

🔹 until 01.08.2024 – pay taxes on part of the CFC profit (Income tax on individuals and military duty); we remind you that taxes are not paid in all cases because there are conditions for exemption from taxation, and you can limit yourself only to reports and notifications; if the company was registered in 2024, no taxes are paid this year.

Submission of documents and payment of taxes

Submission of notification, declaration, reporting, and payment of taxes – all this can be done remotely, without the personal participation of the controlling person (CFC owner). Documents are submitted to the tax inspectorate in electronic form through the payer’s electronic account, authorization with an electronic digital signature. If necessary, your interests can be represented by a lawyer and accountant by proxy.

💡 We will be happy to help if you have questions about CFC:
– do you belong to controlling persons;
– how to prepare for declaration and reporting;
– did not have time to report on time, what to do, what the consequences are;
– what is the responsibility if a report, notification, or other violations are not submitted;
– recommendations and action plan in your situation;
– other relevant issues.

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