The Law of Ukraine “On Amendments to the Tax Code of Ukraine to improve tax administration, eliminate technical and logical inconsistencies in tax legislation” from 16.01.2020 № 466-IX came into force on 23.05.2020, except for the rules that have special dates of entry into force.
Article 392 “Controlled foreign companies” TCU comes into force on 01.01.2021.
A controlled foreign company is any legal entity registered in a foreign state or territory that is recognized as being under the control of a natural person resident in Ukraine or a legal entity resident in Ukraine in accordance with the rules established by the TCU.
In the cases provided for in this Article, a foreign entity without the status of a legal entity may be equated to a controlled foreign company.
The controlling person is a natural person or a legal entity – residents of Ukraine, who are direct or indirect owners (controllers) of the controlled foreign company. In particular, a foreign company is recognized as a CIC if the controlling person is a resident of Ukraine, a natural person or legal entity:
a) owns a share in a foreign legal entity of more than 50%, or
b) owns a share in a foreign legal entity of more than 10%, conditions that several natural persons – residents of Ukraine and / or legal entities – residents of Ukraine own shares in a foreign legal entity, the total amount of which is 50% or more, or
c) separately or together with other residents of Ukraine – related parties control over a foreign legal entity.
The payer of the profit tax of a controlled foreign company is the controlling person.
The object of taxation for personal income tax (corporate income tax) of the controlling person is the part of the adjusted profit of the controlled foreign company, proportional to the share owned or controlled by such natural (legal) person on the last day of the relevant reporting period. adjusted profit of a controlled foreign company.
Controllers are obliged to submit a report on controlled foreign companies to the supervisory authority simultaneously with the submission of the annual declaration of property and income or corporate income tax return for the relevant calendar year by electronic means in electronic form in compliance with the law on electronic document management and qualified electronic signature.
Duly certified copies of the CIC financial statements confirming the amount of profit for the reporting year must be attached to the CIC report.
The first report on controlled foreign companies should be submitted in 2022 for 2021.