Peculiarities of preparing and submitting reports on controlled foreign companies (CFCs) in Ukraine

Анотація

Introduction. The introduction of controlled foreign company (CFC) reporting in Ukraine since 2022 has become an important stage in the development of tax legislation and its adaptation to international transparency standards. The practical implementation of this requirement still requires proper methodological and technical support, as the reporting system remains at the stage of institutional formation and testing. Problem Statement. The process of preparing and submitting CFC reports involves certain organizational and procedural difficulties caused by the novelty of the mechanism, diversity of financial information sources, and gradual expansion of the electronic functionality of the tax administration. Under such conditions, it becomes relevant to summarize practical aspects of reporting and to outline directions for its further improvement. The purpose of the study is to assess the regulatory clarity of tax and financial reporting of Ukrainian residents’ CFCs, to identify key administrative and technical challenges in the reporting process, and to formulate proposals for improving reporting procedures in order to ensure legal certainty and stability of tax regulation. Methods. The research applies normative-legal, analytical, and logical-structural methods to examine the provisions of the Tax Code of Ukraine, orders of the Ministry of Finance, and clarifications of the State Tax Service. The method of generalization was used to systematize practical problems of reporting, while content analysis enabled identification of typical errors recorded by tax authorities. Results. The study identifies the main features of forming CFC reporting in current conditions, particularly the issues of defining effective control, calculating adjusted profit, preparing financial statements, and submitting documents through the electronic taxpayer’s cabinet. Typical cases requiring additional clarification from tax authorities are summarized. The impact of martial law on reporting deadlines and taxpayers’ residency status is also outlined. Conclusions. Enhancing the efficiency of CFC reporting requires gradual improvement of regulatory detailing, modernization of electronic reporting infrastructure, development of methodological recommendations, and strengthening of tax consulting practices. These measures will contribute to greater transparency of the reporting process, reduction of taxpayers’ risks, and establishment of a stable and predictable framework for implementing the controlled foreign company regime in Ukraine.

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