CFC Report: What Information Must Be Included?

The introduction of Controlled Foreign Company (CFC) rules in Ukraine became part of the global de-offshorization process. Owners of foreign businesses who qualify as controlling persons are required to submit reports to the State Tax Service of Ukraine.

This article explains what information must be included in a CFC report in order to avoid tax disputes, penalties, and other legal risks.

Who Must Submit a CFC Report?

A CFC report must be submitted by a controlling person who directly or indirectly owns or controls a foreign company under the criteria established by the Tax Code of Ukraine.

What Information Must Be Included in the CFC Report?

According to Article 39-2 of the Tax Code of Ukraine and official tax guidance, the report must contain the following mandatory information.

1. General Information About the CFC

The report should specify:

• company name;
• country of registration;
• tax or identification number;
• company registration number;
• registered address;
• legal form of the company.

2. Financial Information

The controlling person must disclose:

• total income and expenses of the CFC;
• net profit or loss;
• taxes accrued and paid;
• value of assets;
• information on dividends paid.

3. Ownership Structure

The report must include:

• ownership percentage of the controlling person;
• information about other beneficial owners;
• details regarding joint control arrangements.

4. Audit Information

If an audit was conducted, the report should include:

• confirmation that the audit took place;
• name of the audit company;
• summary of the audit findings.

5. Supporting Documents

The following documents are generally attached to the report:

• financial statements of the CFC;
• audit opinion;
• ownership structure documents;
• evidence supporting tax exemptions;
• proof of taxes paid abroad.

Reporting Deadline

The CFC report is submitted together with the annual tax declaration of the individual or legal entity.

Typically, the deadline is April 30 of the year following the reporting period.

Consequences of Incomplete or False Information

Providing incomplete or inaccurate information may result in:

• substantial fines;
• additional tax assessments;
• penalties and late payment interest;
• tax audits;
• criminal liability risks in cases involving intentional misconduct.

Practical Recommendations

To minimize risks, it is recommended to:

• collect financial information in advance;
• analyze the ownership and control structure;
• conduct a CFC audit;
• engage qualified lawyers and accountants;
• retain all supporting documents and correspondence.

Conclusion

A CFC report is not merely a formality — it is a comprehensive tax document requiring accuracy, completeness, and timely submission. Mistakes or missing information may lead to serious financial and legal consequences.

The Ukrainian Bar and Real Estate Association provides comprehensive assistance regarding CFC matters, including:

• ownership structure analysis;
• preparation of reporting documents;
• tax planning;
• assistance during audits;
• protection of business interests.