Features of Taxation of CFC Dividends in Ukraine
Features of Taxation of CFC Dividends in Ukraine
In our latest publication, we address the crucial issue of the taxation of profits from controlled foreign corporations (CFCs), specifically dividends received from Ukrainian legal entities. According to section 170.13 of article 170 of the Ukrainian Tax Code, dividends received by a CFC from Ukrainian companies are included in the controlling person’s total taxable income.
Different Tax Rates for Dividends
It is important to note that such income is taxed at different rates:
- Dividends from legal entities that are corporate income tax payers (excluding collective investment institutions) are taxed at a rate of 5%.
- Dividends from collective investment institutions and entities that do not pay corporate income tax are taxed at a rate of 9%.
These dividends are reflected in Section II of the Declaration of Property Status and Income in line 10.4, which is included in the total annual taxable income. However, such amounts are not considered when determining the portion of the CFC’s profit for further taxation upon their actual payment to the controlling person.
Documentation and Additional Resources
We remind you that the form of the tax declaration and the instructions for it were approved by the Order of the Ministry of Finance from October 2, 2015, No. 859, with amendments.
For further details, refer to the Individual Tax Consultation No. 579/IPK/99-00-24-03-03 IPK from February 2, 2024.
For additional information and consultation on filing the declaration and taxation of dividends, please contact “Zubritska’s Accounting Clinic” at expertz.com.ua.
