The Importance of Filing a Notification of Control over Foreign Companies
The Importance of Filing a Notification of Control over Foreign Companies
According to subparagraph 392.5.5 of paragraph 392.5 of article 392 of the Ukrainian Tax Code, both individual and corporate residents of Ukraine who have control over foreign companies are required to inform the tax service about each case of acquisition or divestiture of a stake in such companies. This applies to both direct and indirect control, as well as the creation or acquisition of property rights that entitle participation in the income or profits of an organization without the status of a legal entity.
Obligation to File a Notification
A notification about such events must be sent to the tax authority no later than 60 days after the relevant event. The form and procedure for submission are regulated by the central executive authority in the field of financial policy.
Consequences of Non-Compliance
Failure to fulfill this obligation can lead to serious financial consequences. Specifically, non-notification of such events is subject to a fine of 300 living wages for able-bodied persons, which were in effect on January 1 of the reporting year, for each such case.
Importance of Timely Submission
It is important to emphasize that missing the 60-day deadline does not exempt you from the obligation to submit a Notification. Even if the deadline is missed, it is necessary to rectify the situation as soon as possible by submitting the appropriate Notification to the tax service.
Additional Information
Please refer to Individual Tax Consultations No. 655 – 656/IPK/99-00-24-03-03 IPK from February 9, 2024, for more details.
For further consultation on how to submit notifications and avoid fines, please contact “Zubritska’s Accounting Clinic” at expertz.com.ua.
