Preparation
and submission
of CFC reporting

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It’s 2024, it’s almost here, and if you landed on this page in 2024, it’s 100% that you need to prepare for CFC reporting for 2022-2023 🙂 CFC reporting is not a simple filing of an annual declaration – it is a complex, multi-level financial report (or zero if the company did not conduct any activity) on the financial expenses and income of your Controlled Foreign Company.

 

How do you prepare for CFC reporting in 2024?

 

So many questions, but so little information from the web? Here is the answer and a list of what you will need to prepare the CFC report:

  • The deadlines are burning like Katsap tanks, which means that according to Art. 39-2.5.2. of the Tax Code of Ukraine, you must quickly order duly certified financial statements for your CFC(s) to be on time.
  • If you have old CFCs (those registered before 2022 and are still active), it’s time to remember about them and order comprehensive financial statements for them as well.
  • Suppose you have inactive CFCs (those you do not use and do not have any financial movements, but they exist on paper and in the register). In that case, it is the best time to apply for their liquidation and reduce the amount of reporting in the future.

 

What period should I submit a report to the CFC?

 

The first reporting (tax) year for the Report is 2022. If you registered a company in 2023, this also means that in 2024, you must submit the CFC Report simultaneously with submitting an annual income tax return or a corporate income tax return.

 

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What form of Report should my CFC submit?

 

As of November 13, 2023 (before the entry into force of the draft law No. 8137), the legislation provides for two forms of the Report: full and abbreviated. 

 

  • Who submits an abbreviated CFC report?

The abbreviated form of the Report is submitted when the controlling person is unable to ensure the preparation of financial statements of the controlled foreign company and/or calculation of the adjusted profit of the controlled foreign company by the deadline for submission of the annual declaration of property and income or corporate income tax return.

 

  • Who submits the full CFC report?

This form differs from the abbreviated form not only in size – it consists of more than 30 items. It also differs from the abbreviated form in size- consisting of 30 items – and the information to be provided in this Report. In the full Report, it is necessary to correctly determine what type of control, type, and ownership structure of the CFC corresponds to your case. If the draft law No. 8137 is adopted, only the complete form of the Report will be available. 

 

We have a whole article on the shortened and complete form of the Report for CFCs

Submitting a CFC report with the Finevolution team

Our team has prepared several options for submitting CFC reports for independent preparation and interaction with our specialists. 

 

  • Option #1 up to 2 million

For cases with total income from all sources, according to the financial statements, does not exceed the equivalent of EUR 2 million at the end of the reporting period.

 

  • Option #2 over 2 million

For cases with total income from all sources, according to the financial statements, exceeds the equivalent of EUR 2 million at the end of the reporting period.

 

What is included in the service of preparing and submitting a CFC report?

  • Initial consultation. Collection of necessary data from the client.
  • Preparation of a report for 1 tax year for 1 controlling person for 1 CFC 
  • Analysis of the submitted financial statements of a foreign company in another jurisdiction
  • Sending a report through the taxpayer’s electronic account
  • 1 hour of consultation communication with the translation agency regarding the translation order (if necessary)

*The cost of translation is paid to the translation agency (if necessary)

Self-submission of the CFC report

Suppose you want to prepare for the CFC report on your own and understand all the nuances of the legislation. In that case, we have ready Option #3 Roadmap (step-by-step instructions) for independent preparation and submission of reports.

Please note! The option of preparing and submitting the Report independently is relevant only if the income is up to EUR 2 million, and, accordingly, there is no obligation to calculate the adjusted profit of the CFC. 

The instructions are developed specifically for your case, considering your CFC’s current situation. The instruction contains:

  • Deadlines and format for submitting documents
  • Detailed instructions for filling out the Report and related documents
  • A specific list of documents that are required to be presented with the Report
  • List of documents required for translation
  • Nuances and tips for preparing financial statements in a foreign jurisdiction
  • Provided in writing and oral discussion of all issues at an online meeting. The preparation period is 5-7 business days.

To order the Preparation and submission of the CFC report or “CFC notification” service, please leave a request through the form below Viber, Telegram, WhatsApp to get a detailed consultation on Controlled Foreign Companies (CFC) in Ukraine.

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