How can a controlling person withdraw an erroneously submitted abbreviated CFC Report (invalidate it)?

Pursuant to subpara. ³⁹².1.1 of the TCU, a controlled foreign company (hereinafter referred to as CFC) is any legal entity registered in a foreign state or territory that is recognized as being under the control of an individual resident of Ukraine or a legal entity resident of Ukraine in accordance with the rules established by the TCU.

For the purposes of tax control over the taxation of profits of a controlled foreign company, the reporting (tax) period is a calendar year or other reporting period of a controlled foreign company ending within a calendar year (sub-clause ³⁹².5.1 of the TCU).

At the same time, subpara. 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 referred to as the CFC 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 No. 851-IV "On Electronic Documents and Electronic Document Management" and No. 2155-VIII "On Electronic Identification and Electronic Trust Services" dated October 05, 2017.

The CFC 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.

Thus, the controlling person is obliged to submit the CFC Report simultaneously with the submission of the annual declaration of property and income for the relevant calendar year.

According to sub-clause ³⁹².5.4 of the TCU, if the controlling person is unable to ensure the preparation of financial statements of the controlled foreign company and/or calculation of the adjusted profit of the controlled foreign company by the date of the deadline for submission of the annual declaration of property and income or corporate income tax return, such controlling person shall submit the CFC Report in a shortened form, which contains only the information provided for in sub-clauses "a" - "c" of clause ³⁹².5.3 of the TCU.

In case of submission of the CFC Report in a shortened form, the controlling person is obliged to submit the full CFC Report by the end of the calendar year following the reporting (tax) year.

At the same time, if, in accordance with such a report, the total taxable income, the object of taxation by corporate income tax of the controlling person increases, such person shall file an adjusted annual declaration of property and income or a corporate income tax return by the end of the calendar year following the reporting (tax) year.

In view of the above, the current legislation does not provide for a procedure for withdrawing an erroneously submitted abbreviated CFC Report and invalidating it. At the same time, the controlling person has the right to submit an information letter through the taxpayer's Electronic Account or directly to the territorial body of the State Tax Service of Ukraine with a reasonable explanation of the erroneous submission of the CFC Report.