Preparing for CFC reporting is an essential and time-consuming process that requires careful planning and consideration of various aspects. Incorrect or untimely submission of CFC reports may result in significant fines and legal consequences.
Timeframe for preparing CFC Reports
Preparing a CFC report in one day or even a week is unrealistic. This process requires approximately two weeks or more, depending on the complexity and volume of data to be processed.
Please note the deadlines for submitting CFC reports for 2022-2023 in 2024. It is essential not to miss the April 30, 2024, deadline to avoid possible fines and increase the efficiency of your reporting.
The importance of timely preparation of the CFC report
- Familiarizing yourself with the rules and regulations of CFC reporting in advance allows you to plan your activities better and avoid mistakes when submitting reports.
- Late or incorrect submission of reports to the CFC may result in financial penalties and other unpleasant consequences.
- Timely preparation allows you to identify and minimize risks associated with CFC reporting.
Penalties for late or incorrect submission of the report
The maximum fines for failure to comply with CFC reporting requirements can be significant. Current penalties for late or incorrect submission of the report include:
| UAH 268,400 – submission failed a CFC report | 100 times the amount of the PM |
| up to UAH 134,200 – late submission of the CFC report by the controlling person | One minimum wage for each calendar day of non-submission, but not more than 50 minimum wages |
| up to UAH 2,684,000 – failure of the controlling person to reflect information on available CFCs in the CFC report and to reflect information specified in subpar. “d” – “h” of deficient. 39-2.5.3 of the Tax Code, regarding existing CFCs | 3% of the amount of CFC’s income or 25% of the adjusted profit of the CFC for the relevant year, not reflected in the CFC report, whichever is higher, but not more than 1000 times the minimum wage, for each fact of failure to reflect the CFC and for all amounts not reflected |
| up to UAH 2,684,000 – failure to submit or incomplete submission of TP documentation or other documents on CFCs at the request of the supervisory authority | 3 % of the amount of CFC’s income for which the documentation and copies of documents were not submitted, but not more than 1000 times the minimum wage |
| up to UAH 805,200 – failure to submit a CFC report within 30 calendar days following the last day of the deadline for payment of financial sanctions | Five minimum wages for each calendar day of failure to submit the CFC report, but not more than 300 minimum wages |
*PM – the subsistence minimum for non-disabled persons established as of January 1 of the tax (reporting) year
Recommendations for timely submission of the CFC report
- We recommend you start preparing and collecting documentation at the end of 2023 to have enough time to maintain aspects.
- Allow e into account extra time for possible delays due to holidays and weekends.
- Leave time for unforeseen circumstances that may arise during the preparation of the report.
- Make sure you understand all the requirements related to CFC reporting.
- Consider consulting with CFC reporting specialists to ensure the report is submitted correctly. Preparing all necessary documents in advance is essential to avoid delays in submitting the report.
- Ensure all data to be included in the report is accurate and up-to-date.
Start preparing for CFC reporting in advance! Our team will help with the preparation and submission of the CFC report, as well as design a detailed roadmap for your case. Please find more information about the options for cooperation with us here.
If you need advice on submitting a CFC report or a CFC notification, please contact us via WhatsApp, Telegram, or Viber, or submit an inquiry through our online form. Business Hours: Monday to Friday, 9:00 AM — 7:00 PM.
