We want to remind you that starting in 2022, Ukrainian residents who own foreign companies must report and provide tax information about such companies.
These are the specific obligations imposed on Ukrainian tax residents who own foreign companies (CFCs):
Firstly, you must notify the tax authorities that you have become the owner or controller of a CFC.
It is mandatory to notify the tax authorities of the acquisition or loss of such control within 60 days from the event date.
Failure to notify may result in a penalty of 300 minimum living wages, which amounts to 805,200 UAH in 2023.
Secondly, you need to submit reports.
Reporting on controlled companies is part of the declaration of assets and income.
Along with the declaration, you need to submit a CFC appendix, which indicates the adjusted income of the CFC and the taxes accrued.
If you have two or more foreign companies, CFC appendices should be filed separately for each company.
Thirdly, tax payment.
Suppose you are fortunate, your foreign business is doing well, and your income exceeds 2 million euros. In that case, you will have to distribute dividends on paper and pay taxes, even if you have yet to pay them out.
Please note that:
If the CFC's income exceeds 2 million euros, no taxes are accrued or paid on the undistributed profit.
In 2023, there is an exemption from filing a declaration for 2022. The report can be submitted in 2024, declaring the results for 2022-2023.