Key Aspects of Filing the CFC Report Under New Regulations
Key Aspects of Filing the CFC Report Under New Regulations
In light of recent updates to the regulatory framework, understanding the key aspects of filing the Controlled Foreign Corporation (CFC) report under new rules is crucial for Ukrainian residents controlling foreign entities. Based on the Ministry of Finance’s Order No. 512 from September 22, 2021, we outline the essential components for compliant reporting.
1. Form and Procedure for Filing
The newly approved forms of reporting require detailed disclosure of information in designated sections, particularly regarding the adjusted profit of a CFC, calculated based on its financial statements and specific features prescribed by Ukrainian tax legislation.
2. Mandatory Fields for Completion
Fields from 25.1 to 25.3, which relate to the calculation of profit, are mandatory and must be filled in hryvnias without cents. These values can be positive, negative, or zero.
3. Tax Exemption of CFC Profit
If the profit of a CFC is exempt from taxation, there is no need to calculate adjusted profit, and the exemption should be indicated in field 27.
4. Conditions for Exemption from Taxation
Field 28 must specify the conditions under which the profit is exempt if field 27 shows a profit greater than zero. This will be accompanied by a zero in fields 25.1-25.3.
5. Necessity of Filing Attachments
In cases where the profit is exempt from taxation, attachments to the CFC Report (K, CP, TC) are not submitted, and lines 31-33 of the CFC Report also remain unfilled.
Official Source Reference:
Refer to the Individual Tax Consultation No. 676_IPK_99-00-21-02-03 from February 9, 2024, for more details.
For additional information and consultation regarding the CFC reporting process, please contact “Zubritska’s Accounting Clinic” at expertz.com.ua.
