The STSU insists on the need to reflect full information in CFC reports.
The State Tax Service of Ukraine draws the attention of controllers of controlled foreign companies (CFCs) to the need to reflect complete information in CFC reports.
The Order of the Ministry of Finance dated 25.08.2022 No. 254 approved the form of the Report on Controlled Foreign Companies, the form of the abbreviated Report on Controlled Foreign Companies (hereinafter referred to as the CFC Report), the Procedure for filling out the CFC Report, the abbreviated form of the CFC Report and submission to the supervisory authority.
Paragraph 392.5 of the Tax Code sets out the requirements for the preparation and submission of the CFC Report, in particular, it stipulates that the CFC Report shall be submitted 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 requirements of the Laws of Ukraine "On Electronic Documents and Electronic Document Management" and "On Electronic Identification and Electronic Trust Services".
The Taxpayer's Electronic Account contains a CFC Report form with a form identifier: J0108701 - for legal entities and F0108701 - for individuals.
Subparagraph 392.5.3 of the TCU defines the list of information to be indicated in the CFC report.
At the same time, the provisions of clause 392.4 of the TCU provide for a list of conditions under which the adjusted profit of a CFC is not included in the tax base of the controlling person.
At the same time, according to subparagraph 392.4.3 of the TCU, if the CFC's profit is exempt from taxation in accordance with the provisions of this paragraph, the controlling person is exempt from the obligation to calculate the adjusted profit of the CFC.
Please note that the TCU does not provide for any specific rules or exceptions for a taxpayer - a controlling person regarding the failure to reflect in the CFC Report the information specified, in particular, in subparagraphs "f", "g", "h", "i" of subparagraph 392.5.3 of the TCU, and therefore, such information should be reflected in the relevant columns of the CFC Report (columns 29 - 34).
Thus, in case of exemption from taxation of CFC's profit in accordance with the requirements of paragraph 392.4 of the TCU, there are no legal grounds for failure to reflect in the CFC Report the information specified in subparagraphs "f", "g", "h", "i" of subparagraph 392.5.3 of the TCU.
At the same time, liability for violation of the Code's requirements for failure to disclose information in the CFC Report is determined by paragraph 120.7 of the TCU.
We also note that Article 50 of the TCU entitles the controlling person to submit a new or clarifying CFC report.
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