Owning a foreign company: reporting, tax and residency
If you are a Ukrainian tax resident and control a company abroad, article 39-2 of the Tax Code applies to you. We break down when the duties arise, what to file and when no tax is due.
Owning a foreign company means CFC reporting, sometimes CFC income tax, and always questions about the owner's tax residency. We help you sort it out and do it correctly.
Key point as of 2026
During martial law, penalties for CFC rule violations do not apply, but only if the controlling person fulfils the reporting duties within six months after martial law ends or is cancelled (Law No. 4113-IX of 04.12.2024). The duty itself has not been cancelled or postponed: reports for every year starting from 2022 will still have to be filed. The only difference is whether you prepare them calmly now, or all at once within six months.
Склад обслуговування
Specifics
- 1Annual reporting
You must file every year, even if the CFC was dormant.
- 2Fines for late filing
Are high. Better to file on time.
- 3Link to financial monitoring
Clear sources of funds and structure, not just a tax issue.
Do you have a CFC?
A controlled foreign company is any legal entity registered abroad, or an entity without legal personality (trust, partnership, fund), that is controlled by a Ukrainian resident. The controlling person can be an individual or a Ukrainian company.
Over 50%
You directly or indirectly hold a share above 50%: the classic and simplest case.
From 10% with 50% combined
Your share is 10% or more while Ukrainian residents together hold over 50% of the company.
Actual control
There may be no shareholding at all. What matters is who gives binding instructions, operates the account, negotiates on behalf of the company or is named as the beneficial owner.
People most often fail to see themselves as controllers in two situations: the company is registered to a relative or nominee, and the company is dormant. Neither removes the duty. Actual control is a standalone test, and a report is filed even for a zero-activity company.
What to file and when
| What | When | Details |
|---|---|---|
| Notice of acquiring or disposing of a share, starting or ending actual control | 60 calendar days from the event | A separate document, not the same as the report |
| CFC report (individual) | by 1 May, together with the annual income declaration | Form ID F0108701 |
| CFC report (legal entity) | by 1 March, together with the corporate income tax return | Form ID J0108701 |
| CFC financial statements | together with the report | Duly certified copies confirming the amount of profit |
| Full report, if a short one was filed | by 31 December of the following year | A short report is a deferral, not an alternative |
A report is filed for each CFC separately. Several companies mean several reports.
When there is no tax
Having a CFC does not mean automatic tax. Profit is exempt in several cases, and this is where most of the advisory work happens, because each ground must be evidenced.
- Combined income of all your CFCs does not exceed EUR 2 million for the reporting year, the ground that covers most owners of small companies.
- There is a double taxation treaty or a tax information exchange agreement with the CFC jurisdiction, and the company either pays tax at an effective rate of at least 13% or passive income is not more than 50% of total income.
- The CFC is a public company whose shares are traded on a recognised stock exchange.
- The CFC is a charity that does not distribute income to its founders.
The effective rate is not the statutory rate of another country. It is income tax expense divided by pre-tax profit per the financial statements. An exemption from tax does not exempt you from the report: the report is filed in any case, with the exemption ground stated separately.
How the tax is calculated where no exemption applies
The taxable object is the part of the CFC's adjusted profit proportional to your share of ownership or control. Adjusted profit is derived from the company's pre-tax financial statements and converted into hryvnia at the weighted average NBU rate for the reporting year.
Worked example
The CFC's annual profit is EUR 100,000 and your share is 60%. EUR 60,000 in hryvnia equivalent falls under Ukrainian tax. For an individual controller that is 18% personal income tax plus the military levy. If the company distributed the profit as dividends and you received them before filing the declaration, a reduced rate applies.
Owner residency is the first question, not the last
CFC duties arise for Ukrainian residents. So the logic of "I've lived abroad for three years, this doesn't concern me" is tested first, and most often not confirmed.
- 183 days an important test, but neither the only nor the first one on the list.
- Centre of vital interests family, housing, main source of income, business assets, place of registration.
- Citizenship used as a test when the previous ones give no clear answer.
- Status in another country does not by itself end Ukrainian residency, a procedure and documents are required.
They sorted out CFC and residency. I stopped avoiding the topic. Now I report on time and sleep well.
Поширені питання
No. It depends on the income type, jurisdiction and double-taxation treaties. We calculate per case.
It is better to file with minimal consequences now than to wait for a request from the tax service.
It depends on the centre of vital interests and other criteria. We analyse and provide a written opinion.
Guide: file the CFC notification on your own
Four trigger events and a 60-day deadline, step-by-step completion of form F1308001 in the Electronic Cabinet, a worked example and receipt checks. 20 pages, in Ukrainian or English.
CFC notification
Four trigger events and a 60-day deadline, form F1308001 in the Electronic Cabinet, a worked example and confirmation that the notification was accepted.
- The four events that start the clock: acquiring and disposing of a holding, start and end of actual control
- The 60-calendar-day deadline — counted from the event itself, not from when you remembered it
- Step-by-step completion of form F1308001 in the Electronic Cabinet — with screenshots
PDF right after payment. Ukrainian or English.
Інші статті
Суміжні галузі
Поговоримо про ваш бізнес
Залиште заявку — підберемо рішення під вашу ситуацію та порахуємо вартість обслуговування.