CFC reporting rules constitute a comprehensive system of obligations, where deadlines are calculated in days, a full package of documents must be submitted, and penalties may amount to hundreds of thousands of hryvnias.
A CFC is a foreign company, or an arrangement without legal personality, in respect of which a Ukrainian resident is recognised as a controlling person.
Grounds for recognition as a controlling person include:
Parker Russell Ukraine supports you throughout the full CFC cycle:
from determining whether you qualify as a controlling person to preparing the complete set of documents, calculating tax implications, and assisting with submission through the Electronic Taxpayer Cabinet of the State Tax Service of Ukraine.
For CFC purposes, it is important to consider not only direct ownership, but also indirect ownership through a chain of companies or arrangements. The State Tax Service separately emphasises that, where ownership is exercised through a single chain of persons, the indirect ownership interest is determined by multiplying the interests at each level of the chain. Where ownership is exercised through several chains, the interests are aggregated across each chain.
Example: one ownership chain
An individual resident of Ukraine owns 60% of Company A, while Company A owns 40% of the CFC. The resident’s indirect ownership interest in the CFC is calculated as follows:
60% × 40% = 24%
This is the ownership interest used to assess whether control exists.
Example: several ownership chains
A resident owns 60% of Company A, while Company A owns 40% of the CFC, resulting in a 24% indirect interest. At the same time, the resident owns 30% of Company B, while Company B owns 20% of the CFC, resulting in a 6% indirect interest. The resident’s total indirect ownership interest in the CFC is therefore:
24% + 6% = 30%
Note: when determining an ownership interest, the “100% rule” applies: if a person actually owns more than 50%, through one or several chains, in a legal entity within the chain, that person is deemed to own 100% of such legal entity.
To comply with CFC reporting requirements, the controlling person must complete the following three blocks of documents:
Annual tax return reflecting CFC income
for individuals, this is the annual tax return on property status and income with the CFC appendix; for legal entities, this is the corporate income tax return with the CFC appendix.
When it is submitted:
upon acquisition or disposal of an ownership interest in a foreign company, as well as upon the commencement or termination of actual control.
Deadline:
within 60 calendar days from the date of the relevant event.
Form in the Electronic Taxpayer Cabinet:
F1308001 for individuals / J1308001 for legal entities.
What matters in practice:
the critical elements of the notification are the date of the event, the ownership structure, whether direct or indirect, and the logical consistency of the information with the future CFC Report.
Risks in case of non-submission:
a penalty of 300 subsistence minimums for each instance of non-submission.
Note: as of 1 January 2026, the subsistence minimum for able-bodied persons is UAH 3,328.
The total penalty amount is UAH 998,400.
When and how it is submitted:
The CFC Report is submitted electronically together with the annual tax return of the controlling person for the relevant calendar year.
In practice, this means that:
Penalties for missing deadlines and incomplete CFC Reports are substantial and often significantly exceed typical penalties for tax reporting violations. To illustrate the scale, based on the subsistence minimum as of 1 January 2026 of UAH 3,328:
CFC reporting must always be logically completed by submitting a tax return:
The key requirement is straightforward: the amounts, ownership interests, and periods must be consistent with:
We establish whether control exists, whether indirect or actual, determine the moment when the relevant obligations arise, and identify the correct reporting periods for CFC reporting.
We prepare a detailed calendar of deadlines and a list of documents: what exactly must be submitted, within which deadlines, who must sign it, and what source data and supporting evidence are required for submission.
We ensure the technical and formal readiness of the package for submission, assist in handling refusals, and eliminate the reasons for non-acceptance.
We prepare the Notification, the CFC Report, whether full or short-form, and the tax component as one coherent and consistent package, with verified ownership interests, periods, and indicators, free from discrepancies.
Where necessary, we prepare clarifications and adjustments, develop explanatory materials, compile and systematise the evidence base, and support a consistent tax position in case of inquiries or audits.
The status of a controlling person arises on at least one of the grounds defined in Article 39-2 of the Tax Code:
The obligation to submit a Notification on the controlled foreign company arises within 60 calendar days of the event triggering the time limit – the acquisition or disposal of a participating interest, the commencement or termination of actual control. The obligation to submit the Report on the controlled foreign company arises in respect of the reporting calendar year and is filed together with the controlling person’s annual tax return.
The exemption applies only to taxation, not to the obligation to report. Article 39-2 of the Tax Code provides that the adjusted profit of a controlled foreign company is not included in the controlling person’s total taxable income where the aggregate income of all controlled foreign companies of a single controlling person, from all sources, based on financial statements, does not exceed the equivalent of EUR 2 million at the end of the reporting period. The obligation to submit the Report on the controlled foreign company and the controlled foreign company annex to the tax return is nevertheless retained; the grounds for exemption are reflected in the relevant sections of the Report. Failure to meet the reporting obligation constitutes an independent ground for the imposition of sanctions – regardless of whether the profit of the controlled foreign company was actually taxed in Ukraine.
The abridged Report is used where, by the deadline for filing the annual tax return, the controlling person is objectively unable to prepare the financial statements of the controlled foreign company – in particular, due to the deadlines for their preparation under the legislation of the company’s country of registration. The full Report contains the financial section and the calculations that form the tax base, and is accompanied by duly certified copies of the financial statements of the controlled foreign company. If an abridged Report was filed for a given year, the full Report is to be submitted by the end of the calendar year following the reporting year. The choice of format at the outset has practical significance: it determines the logic of document preparation and the timing of obtaining financial statements from abroad.
Sanctions are established by paragraph 120.7 of Article 120 of the Tax Code of Ukraine and are calculated as a multiple of the subsistence minimum for an able-bodied person in force as of 1 January of the relevant tax (reporting) year. The list covers:
The aggregate amount of sanctions is capable of exceeding the actual tax liability several times over, which makes compliance with deadlines and consistency of the submitted forms a priority in its own right.
The engagement is conducted under the regime of professional secrecy, with the application of internal procedures for access to information:
The work begins with a preliminary assessment: a list is established of all foreign companies and entities without legal personality in respect of which the person is a controlling person or in respect of which grounds exist to presume the existence of control. For each controlled foreign company, the following are determined: the reporting period, the basis of control, the size of the participating interest, the availability of grounds for exemption from taxation, and the scope and timing of the financial statements available under the legislation of the relevant jurisdiction.
Where a request is received from the supervisory authority:
Main errors are identified in the submitted forms – the Notification, the Report, or the controlled foreign company annex to the tax return – corresponding amending documents are prepared, together with an assessment of the consequences of self-correction under the Tax Code. Consistency of the explanations with the previously submitted forms is fundamental: discrepancies in the position at different stages may themselves serve as a ground for further action by the supervisory authority.
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Залиште запит — і ми допоможемо побудувати ефективну, транспарентну та довгострокову міжнародну структуру саме для вашого бізнесу, з урахуванням особливостей ринку, вимог українського законодавства та глобальних податкових тенденцій.
У сучасних умовах війни в Україні, посиленого валютного контролю, обмеженого доступу до міжнародного фінансування та значного податкового навантаження, українські компанії все частіше виходять на зовнішні ринки, розміщують виробництво та постачання за межами України, укладають контракти з нерезидентами або переносять частину своєї діяльності за кордон. У таких обставинах правильно побудована міжнародна корпоративна структура — це стратегічний інструмент для збереження та зростання бізнесу.
Parker Russell UA — член міжнародної мережі Parker Russell International, що охоплює 75 юрисдикцій світу, — спеціалізується на розробці ефективних, законних та безпечних структур для міжнародного бізнесу, включаючи питання оподаткування, трансфертного ціноутворення, захисту прав інтелектуальної власності та дотримання правил щодо контрольованих іноземних компаній.
Залиште запит — і ми допоможемо побудувати ефективну, транспарентну та довгострокову міжнародну структуру саме для вашого бізнесу, з урахуванням особливостей ринку, вимог українського законодавства та глобальних податкових тенденцій.
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