How to Properly Determine the Reporting Year for the CFC Report?
How to Properly Determine the Reporting Year for the CFC Report?
Understanding the nuances of determining the reporting year for the Report on Controlled Foreign Companies (CFC) is crucial, particularly when the financial year of a foreign company does not align with the calendar year. Questions often arise, for example, when the financial year starts in June 2022 and ends in June 2023.
Tax Regulation of Reporting Years
According to Ukrainian tax legislation, specifically subparagraph 392.4.1 of paragraph 392.4 of article 392, the first reporting year is considered to be the year in which the reporting period begins. Thus, for the financial period from June 2022 to June 2023:
- The controlling person must submit the CFC Report for the year 2023 by May 1, 2024, along with the annual declaration of property and income for 2023.
- For the financial period from June 2023 to June 2024, the CFC Report for the year 2024 must be submitted by May 1, 2025.
These rules help avoid confusion and ensure clarity in determining the reporting period, which is key to correctly fulfilling tax obligations by controlling persons.
Obtaining Additional Information
For detailed information and clarifications, it is recommended to refer to Individual Tax Consultation No. 654/IPK/99-00-24-03-03 IPK from February 9, 2024.
If you have further questions or need consultation, please contact “Zubritska’s Accounting Clinic” at expertz.com.ua.
