Fill out a CFC report if you have incurred a loss
How to fill in columns 23-24 of the CFC Report if, according to the financial statements, a loss from operating activities was received and the financial result before taxation is a loss?
Paragraph 392.5 of the TCU sets out the requirements for the preparation and submission of the Report on Controlled Foreign Companies. In particular, subpara. 392.5.2 of the TCU provides that controlling persons are obliged to submit the Report on Controlled Foreign Companies (hereinafter - the Report) to the controlling authority simultaneously with the submission of the annual declaration of property status and income or corporate income tax return for the relevant calendar year by means of electronic communication in electronic form in compliance with the requirements of the laws of Ukraine dated 22.05.2003 No. 851-IV "On Electronic Documents and Electronic Document Management" and No. 2155-VIII "On Electronic Identification and Electronic Trust Services" dated 05.10.2017.
The Report must be accompanied by duly certified copies of the financial statements of the controlled foreign company confirming the amount of profit of the controlled foreign company for the reporting (tax) year.
The Order of the Ministry of Finance No. 254 dated 25.08.2022 approved the form of the Report, the abbreviated form of the Report and the Procedure for Completing the Report on Controlled Foreign Companies, the abbreviated form of the Report on Controlled Foreign Companies and Submission to the Supervisory Authority (hereinafter - the Procedure).
The Report and the Procedure clearly define the names of the columns and the procedure for filling them out, i.e., the columns of the Report on Controlled Foreign Companies that contain indicators for declaration must be filled out.
Pursuant to clause 23 of the Procedure, column 23 "Profit from operating activities (UAH)" of the Report shall indicate the profit from operating activities of the controlled foreign company.
In accordance with clause 24 "Profit before tax according to financial statements (UAH)" of the Procedure, column 24 of the Report shall indicate the profit before taxation of the controlled foreign company according to the financial statements.
Columns 23 and 24 of the Report contain a numeric field, are filled in in UAH without cents and may be either positive or negative.
Thus, if, according to the financial statements of the controlled foreign company, a loss from operating activities was incurred and the financial result before taxation is a loss, the amounts of such losses should be indicated in columns 23 and 24 of the Report, i.e. negative numbers should be entered.
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